Correlation Between Boston Beer and UNICHARM

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

Diversification Opportunities for Boston Beer and UNICHARM

0.54

Correlation Coefficient

Boston Beer  UNICHARM

Very weak diversification

The 3 months correlation between Boston and UNICHARM is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and UNICHARM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNICHARM 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 UNICHARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNICHARM has no effect on the direction of Boston Beer i.e., Boston Beer and UNICHARM go up and down completely randomly.

Pair Corralation between Boston Beer and UNICHARM

Assuming the 90 days trading horizon The Boston Beer is expected to under-perform the UNICHARM. In addition to that, Boston Beer is 1.08 times more volatile than UNICHARM. It trades about -0.3 of its total potential returns per unit of risk. UNICHARM is currently generating about -0.07 per unit of volatility. If you would invest  782.00  in UNICHARM on December 21, 2024 and sell it today you would lose (62.00) from holding UNICHARM or give up 7.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

The Boston Beer  vs.  UNICHARM

Boston Beer

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Boston Beer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

UNICHARM

Risk-Adjusted Performance

Very Weak

Over the last 90 days UNICHARM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Boston Beer and UNICHARM

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

The idea behind The Boston Beer and UNICHARM 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.