Correlation Between Boston Beer and Shengkai Innovations
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Shengkai Innovations 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 Shengkai Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Shengkai Innovations, you can compare the effects of market volatilities on Boston Beer and Shengkai Innovations 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 Shengkai Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Shengkai Innovations.
Diversification Opportunities for Boston Beer and Shengkai Innovations
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boston and Shengkai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Shengkai Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengkai Innovations 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 Shengkai Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengkai Innovations has no effect on the direction of Boston Beer i.e., Boston Beer and Shengkai Innovations go up and down completely randomly.
Pair Corralation between Boston Beer and Shengkai Innovations
If you would invest 31,327 in Boston Beer on September 12, 2024 and sell it today you would earn a total of 569.00 from holding Boston Beer or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Boston Beer vs. Shengkai Innovations
Performance |
| Timeline |
| Boston Beer |
| Shengkai Innovations |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boston Beer and Shengkai Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Shengkai Innovations
The main advantage of trading using opposite Boston Beer and Shengkai Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Shengkai Innovations 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 Shengkai Innovations will offset losses from the drop in Shengkai Innovations' 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 |
| Shengkai Innovations vs. Lion One Metals | Shengkai Innovations vs. Franklin Credit Management | Shengkai Innovations vs. Harmony Gold Mining | Shengkai Innovations vs. Royalty Management Holding |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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