Correlation Between Boston Beer and AMERICAN
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By analyzing existing cross correlation between Boston Beer and AMERICAN INTL GROUP, you can compare the effects of market volatilities on Boston Beer and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and AMERICAN.
Diversification Opportunities for Boston Beer and AMERICAN
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boston and AMERICAN is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and AMERICAN INTL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN INTL GROUP 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN INTL GROUP has no effect on the direction of Boston Beer i.e., Boston Beer and AMERICAN go up and down completely randomly.
Pair Corralation between Boston Beer and AMERICAN
Considering the 90-day investment horizon Boston Beer is expected to generate 2.36 times more return on investment than AMERICAN. However, Boston Beer is 2.36 times more volatile than AMERICAN INTL GROUP. It trades about 0.24 of its potential returns per unit of risk. AMERICAN INTL GROUP is currently generating about -0.14 per unit of risk. If you would invest 29,665 in Boston Beer on September 5, 2024 and sell it today you would earn a total of 1,850 from holding Boston Beer or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Boston Beer vs. AMERICAN INTL GROUP
Performance |
| Timeline |
| Boston Beer |
| AMERICAN INTL GROUP |
Boston Beer and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and AMERICAN
The main advantage of trading using opposite Boston Beer and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN'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 |
| AMERICAN vs. Boston Properties | AMERICAN vs. Smith Douglas Homes | AMERICAN vs. Boston Beer | AMERICAN vs. Ambev SA ADR |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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