Correlation Between ABOUT YOU and BOSTON BEER
Can any of the company-specific risk be diversified away by investing in both ABOUT YOU 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 ABOUT YOU and BOSTON BEER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABOUT YOU Holding and BOSTON BEER A , you can compare the effects of market volatilities on ABOUT YOU 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 ABOUT YOU with a short position of BOSTON BEER. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABOUT YOU and BOSTON BEER.
Diversification Opportunities for ABOUT YOU and BOSTON BEER
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ABOUT and BOSTON is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ABOUT YOU Holding 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 ABOUT YOU 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 ABOUT YOU Holding 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 ABOUT YOU i.e., ABOUT YOU and BOSTON BEER go up and down completely randomly.
Pair Corralation between ABOUT YOU and BOSTON BEER
Assuming the 90 days trading horizon ABOUT YOU is expected to generate 1.59 times less return on investment than BOSTON BEER. In addition to that, ABOUT YOU is 1.42 times more volatile than BOSTON BEER A . It trades about 0.12 of its total potential returns per unit of risk. BOSTON BEER A is currently generating about 0.28 per unit of volatility. If you would invest 26,740 in BOSTON BEER A on September 4, 2024 and sell it today you would earn a total of 2,900 from holding BOSTON BEER A or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ABOUT YOU Holding vs. BOSTON BEER A
Performance |
| Timeline |
| ABOUT YOU Holding |
| BOSTON BEER A |
ABOUT YOU and BOSTON BEER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABOUT YOU and BOSTON BEER
The main advantage of trading using opposite ABOUT YOU and BOSTON BEER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABOUT YOU 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.| ABOUT YOU vs. BOSTON BEER A | ABOUT YOU vs. NURAN WIRELESS INC | ABOUT YOU vs. Mobilezone Holding AG | ABOUT YOU vs. Tsingtao Brewery |
| BOSTON BEER vs. TOTAL GABON | BOSTON BEER vs. Walgreens Boots Alliance | BOSTON BEER vs. Peak Resources Limited |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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