Correlation Between Boston Beer and Nippon Yusen

Can any of the company-specific risk be diversified away by investing in both Boston Beer and Nippon Yusen 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 Nippon Yusen 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 Nippon Yusen Kabushiki, you can compare the effects of market volatilities on Boston Beer and Nippon Yusen 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 Nippon Yusen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Nippon Yusen.

Diversification Opportunities for Boston Beer and Nippon Yusen

-0.12

Correlation Coefficient

Boston Beer  Nippon Yusen

Good diversification

The 3 months correlation between Boston and Nippon is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and Nippon Yusen Kabushiki in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Yusen Kabushiki 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 Nippon Yusen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Yusen Kabushiki has no effect on the direction of Boston Beer i.e., Boston Beer and Nippon Yusen go up and down completely randomly.

Pair Corralation between Boston Beer and Nippon Yusen

Assuming the 90 days trading horizon The Boston Beer is expected to under-perform the Nippon Yusen. In addition to that, Boston Beer is 1.0 times more volatile than Nippon Yusen Kabushiki. It trades about -0.04 of its total potential returns per unit of risk. Nippon Yusen Kabushiki is currently generating about 0.18 per unit of volatility. If you would invest  2,932  in Nippon Yusen Kabushiki on October 9, 2024 and sell it today you would earn a total of  321.00  from holding Nippon Yusen Kabushiki or generate 10.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.37%
Values	Daily Returns

The Boston Beer  vs.  Nippon Yusen Kabushiki

Boston Beer

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Boston Beer are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Boston Beer reported solid returns over the last few months and may actually be approaching a breakup point.

Nippon Yusen Kabushiki

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nippon Yusen Kabushiki are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Nippon Yusen may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Boston Beer and Nippon Yusen

The main advantage of trading using opposite Boston Beer and Nippon Yusen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Nippon Yusen 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 Nippon Yusen will offset losses from the drop in Nippon Yusen's long position.

The idea behind The Boston Beer and Nippon Yusen Kabushiki pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.