Correlation Between JLF INVESTMENT and Boston Beer

Can any of the company-specific risk be diversified away by investing in both JLF INVESTMENT 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 JLF INVESTMENT and Boston Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JLF INVESTMENT and The Boston Beer, you can compare the effects of market volatilities on JLF INVESTMENT 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 JLF INVESTMENT with a short position of Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLF INVESTMENT and Boston Beer.

Diversification Opportunities for JLF INVESTMENT and Boston Beer

0.0

Correlation Coefficient

JLF INVESTMENT  Boston Beer

Pay attention - limited upside

The 3 months correlation between JLF and Boston is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JLF INVESTMENT and The Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and JLF INVESTMENT 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 JLF INVESTMENT 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 has no effect on the direction of JLF INVESTMENT i.e., JLF INVESTMENT and Boston Beer go up and down completely randomly.

Pair Corralation between JLF INVESTMENT and Boston Beer

If you would invest  1.00  in JLF INVESTMENT on October 17, 2024 and sell it today you would earn a total of  0.00  from holding JLF INVESTMENT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JLF INVESTMENT  vs.  The Boston Beer

JLF INVESTMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JLF INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JLF INVESTMENT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Boston Beer

Risk-Adjusted Performance

0 of 100

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 nearly stable technical and fundamental indicators, Boston Beer is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JLF INVESTMENT and Boston Beer

The main advantage of trading using opposite JLF INVESTMENT and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLF INVESTMENT 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.

The idea behind JLF INVESTMENT and The Boston Beer 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.