Correlation Between Boston Beer and QEP Resources
Can any of the company-specific risk be diversified away by investing in both Boston Beer and QEP Resources 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 QEP Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and QEP Resources, you can compare the effects of market volatilities on Boston Beer and QEP Resources 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 QEP Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and QEP Resources.
Diversification Opportunities for Boston Beer and QEP Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boston and QEP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and QEP Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QEP Resources 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 QEP Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QEP Resources has no effect on the direction of Boston Beer i.e., Boston Beer and QEP Resources go up and down completely randomly.
Pair Corralation between Boston Beer and QEP Resources
If you would invest 32,452 in Boston Beer on September 26, 2024 and sell it today you would lose (2,918) from holding Boston Beer or give up 8.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Boston Beer vs. QEP Resources
Performance |
| Timeline |
| Boston Beer |
| QEP Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boston Beer and QEP Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and QEP Resources
The main advantage of trading using opposite Boston Beer and QEP Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, QEP Resources 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 QEP Resources will offset losses from the drop in QEP Resources' long position.| Boston Beer vs. Budweiser Brewing | Boston Beer vs. Fomento Economico Mexicano | Boston Beer vs. Heineken NV | Boston Beer vs. Suntory Beverage Food |
| QEP Resources vs. Thor Industries | QEP Resources vs. Aptiv PLC | QEP Resources vs. Cars Inc | QEP Resources vs. Boston Beer |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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