Correlation Between Boston Beer and Pinterest
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Pinterest at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Boston Beer and Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Pinterest, you can compare the effects of market volatilities on Boston Beer and Pinterest and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Boston Beer with a short position of Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Pinterest.
Diversification Opportunities for Boston Beer and Pinterest
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boston and Pinterest is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest and Boston Beer is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Boston Beer are associated (or correlated) with Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Boston Beer i.e., Boston Beer and Pinterest go up and down completely randomly.
Pair Corralation between Boston Beer and Pinterest
Considering the 90-day investment horizon Boston Beer is expected to generate 0.59 times more return on investment than Pinterest. However, Boston Beer is 1.7 times less risky than Pinterest. It trades about 0.13 of its potential returns per unit of risk. Pinterest is currently generating about 0.0 per unit of risk. If you would invest 26,960 in Boston Beer on September 20, 2024 and sell it today you would earn a total of 3,339 from holding Boston Beer or generate 12.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Pinterest
Performance |
| Timeline |
| Boston Beer |
Boston Beer and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Pinterest
The main advantage of trading using opposite Boston Beer and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Pinterest can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Pinterest will offset losses from the drop in Pinterest's long position.| Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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