Correlation Between Corporate Office and BOSTON BEER
Can any of the company-specific risk be diversified away by investing in both Corporate Office and BOSTON BEER 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 Corporate Office and BOSTON BEER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Office Properties and BOSTON BEER A , you can compare the effects of market volatilities on Corporate Office and BOSTON BEER 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 Corporate Office with a short position of BOSTON BEER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and BOSTON BEER.
Diversification Opportunities for Corporate Office and BOSTON BEER
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Corporate and BOSTON is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and BOSTON BEER A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOSTON BEER A and Corporate Office 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 Corporate Office Properties are associated (or correlated) with BOSTON BEER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOSTON BEER A has no effect on the direction of Corporate Office i.e., Corporate Office and BOSTON BEER go up and down completely randomly.
Pair Corralation between Corporate Office and BOSTON BEER
Assuming the 90 days horizon Corporate Office Properties is expected to generate 0.69 times more return on investment than BOSTON BEER. However, Corporate Office Properties is 1.44 times less risky than BOSTON BEER. It trades about 0.08 of its potential returns per unit of risk. BOSTON BEER A is currently generating about 0.0 per unit of risk. If you would invest 2,057 in Corporate Office Properties on September 1, 2024 and sell it today you would earn a total of 1,023 from holding Corporate Office Properties or generate 49.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Office Properties vs. BOSTON BEER A
Performance |
| Timeline |
| Corporate Office Pro |
| BOSTON BEER A |
Corporate Office and BOSTON BEER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and BOSTON BEER
The main advantage of trading using opposite Corporate Office and BOSTON BEER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, BOSTON BEER 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 BOSTON BEER will offset losses from the drop in BOSTON BEER's long position.| Corporate Office vs. Clean Energy Fuels | Corporate Office vs. BJs Restaurants | Corporate Office vs. FRACTAL GAMING GROUP | Corporate Office vs. ANGLER GAMING PLC |
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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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