Correlation Between Boston Beer and KYB PORATION
Can any of the company-specific risk be diversified away by investing in both Boston Beer and KYB PORATION 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 KYB PORATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boston Beer and KYB PORATION, you can compare the effects of market volatilities on Boston Beer and KYB PORATION 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 KYB PORATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and KYB PORATION.
Diversification Opportunities for Boston Beer and KYB PORATION
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boston and KYB is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and KYB PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYB PORATION 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 The Boston Beer are associated (or correlated) with KYB PORATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYB PORATION has no effect on the direction of Boston Beer i.e., Boston Beer and KYB PORATION go up and down completely randomly.
Pair Corralation between Boston Beer and KYB PORATION
Assuming the 90 days trading horizon Boston Beer is expected to generate 8.16 times less return on investment than KYB PORATION. In addition to that, Boston Beer is 1.19 times more volatile than KYB PORATION. It trades about 0.05 of its total potential returns per unit of risk. KYB PORATION is currently generating about 0.5 per unit of volatility. If you would invest 1,520 in KYB PORATION on September 22, 2024 and sell it today you would earn a total of 190.00 from holding KYB PORATION or generate 12.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
The Boston Beer vs. KYB PORATION
Performance |
Timeline |
Boston Beer |
KYB PORATION |
Boston Beer and KYB PORATION Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boston Beer and KYB PORATION
The main advantage of trading using opposite Boston Beer and KYB PORATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, KYB PORATION 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 KYB PORATION will offset losses from the drop in KYB PORATION's long position.Boston Beer vs. Q2M Managementberatung AG | Boston Beer vs. CEOTRONICS | Boston Beer vs. JIAHUA STORES | Boston Beer vs. QURATE RETAIL INC |
KYB PORATION vs. Zoom Video Communications | KYB PORATION vs. The Boston Beer | KYB PORATION vs. Thai Beverage Public | KYB PORATION vs. Guidewire Software |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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