Correlation Between Boston Beer and Weyco
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Weyco 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 Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Weyco Group, you can compare the effects of market volatilities on Boston Beer and Weyco 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 Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Weyco.
Diversification Opportunities for Boston Beer and Weyco
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Weyco is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Boston Beer i.e., Boston Beer and Weyco go up and down completely randomly.
Pair Corralation between Boston Beer and Weyco
Considering the 90-day investment horizon Boston Beer is expected to under-perform the Weyco. In addition to that, Boston Beer is 1.05 times more volatile than Weyco Group. It trades about 0.0 of its total potential returns per unit of risk. Weyco Group is currently generating about 0.05 per unit of volatility. If you would invest 2,422 in Weyco Group on September 3, 2024 and sell it today you would earn a total of 1,149 from holding Weyco Group or generate 47.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Weyco Group
Performance |
| Timeline |
| Boston Beer |
| Weyco Group |
Boston Beer and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Weyco
The main advantage of trading using opposite Boston Beer and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Weyco 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 Weyco will offset losses from the drop in Weyco'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 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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