Correlation Between Boston Beer and LOWES
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By analyzing existing cross correlation between Boston Beer and LOWES INC 425, you can compare the effects of market volatilities on Boston Beer and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and LOWES.
Diversification Opportunities for Boston Beer and LOWES
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Boston and LOWES is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and LOWES INC 425 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES INC 425 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES INC 425 has no effect on the direction of Boston Beer i.e., Boston Beer and LOWES go up and down completely randomly.
Pair Corralation between Boston Beer and LOWES
Considering the 90-day investment horizon Boston Beer is expected to under-perform the LOWES. But the stock apears to be less risky and, when comparing its historical volatility, Boston Beer is 1.05 times less risky than LOWES. The stock trades about -0.4 of its potential returns per unit of risk. The LOWES INC 425 is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 8,154 in LOWES INC 425 on October 23, 2024 and sell it today you would lose (259.00) from holding LOWES INC 425 or give up 3.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
Boston Beer vs. LOWES INC 425
Performance |
| Timeline |
| Boston Beer |
| LOWES INC 425 |
Boston Beer and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and LOWES
The main advantage of trading using opposite Boston Beer and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES'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 |
| LOWES vs. Boston Beer | LOWES vs. United Fire Group | LOWES vs. Sun Life Financial | LOWES vs. Molina Healthcare |
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 Stocks Directory module to find actively traded stocks across global markets.
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