Correlation Between Boston Beer and Summit Environmental
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Summit Environmental 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 Summit Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Summit Environmental, you can compare the effects of market volatilities on Boston Beer and Summit Environmental 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 Summit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Summit Environmental.
Diversification Opportunities for Boston Beer and Summit Environmental
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boston and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Summit Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Environmental 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 Summit Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Environmental has no effect on the direction of Boston Beer i.e., Boston Beer and Summit Environmental go up and down completely randomly.
Pair Corralation between Boston Beer and Summit Environmental
If you would invest 25,951 in Boston Beer on August 26, 2024 and sell it today you would earn a total of 5,329 from holding Boston Beer or generate 20.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Summit Environmental
Performance |
| Timeline |
| Boston Beer |
| Summit Environmental |
Boston Beer and Summit Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Summit Environmental
The main advantage of trading using opposite Boston Beer and Summit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Summit Environmental 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 Summit Environmental will offset losses from the drop in Summit Environmental'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 |
| Summit Environmental vs. Minerals Technologies | Summit Environmental vs. Oil Dri | Summit Environmental vs. H B Fuller | Summit Environmental vs. Northern Technologies |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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