Correlation Between Fortress Transp and Boston Beer

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

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

Diversification Opportunities for Fortress Transp and Boston Beer

0.48

Correlation Coefficient

Fortress Transp  Boston Beer

Very weak diversification

The 3 months correlation between Fortress and Boston is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and Fortress Transp 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 Fortress Transp Infra 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 Fortress Transp i.e., Fortress Transp and Boston Beer go up and down completely randomly.

Pair Corralation between Fortress Transp and Boston Beer

Given the investment horizon of 90 days Fortress Transp Infra is expected to generate 1.95 times more return on investment than Boston Beer. However, Fortress Transp is 1.95 times more volatile than Boston Beer. It trades about 0.09 of its potential returns per unit of risk. Boston Beer is currently generating about 0.02 per unit of risk. If you would invest  10,521  in Fortress Transp Infra on October 3, 2024 and sell it today you would earn a total of  3,883  from holding Fortress Transp Infra or generate 36.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Fortress Transp Infra  vs.  Boston Beer

Fortress Transp Infra

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fortress Transp Infra are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Fortress Transp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Boston Beer

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Beer are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Boston Beer may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Fortress Transp and Boston Beer

The main advantage of trading using opposite Fortress Transp and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transp 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 Fortress Transp Infra and 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.