Correlation Between GRENKELEASING and BOSTON BEER

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

By analyzing existing cross correlation between GRENKELEASING Dusseldorf and BOSTON BEER A , you can compare the effects of market volatilities on GRENKELEASING 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 GRENKELEASING with a short position of BOSTON BEER. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRENKELEASING and BOSTON BEER.

Diversification Opportunities for GRENKELEASING and BOSTON BEER

-0.83

Correlation Coefficient

GRENKELEASING  BOSTON BEER

Pay attention - limited upside

The 3 months correlation between GRENKELEASING and BOSTON is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding GRENKELEASING Dusseldorf and BOSTON BEER A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOSTON BEER A and GRENKELEASING 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 GRENKELEASING Dusseldorf 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 A has no effect on the direction of GRENKELEASING i.e., GRENKELEASING and BOSTON BEER go up and down completely randomly.

Pair Corralation between GRENKELEASING and BOSTON BEER

Assuming the 90 days trading horizon GRENKELEASING Dusseldorf is expected to under-perform the BOSTON BEER. In addition to that, GRENKELEASING is 1.3 times more volatile than BOSTON BEER A . It trades about -0.03 of its total potential returns per unit of risk. BOSTON BEER A is currently generating about -0.02 per unit of volatility. If you would invest  31,550  in BOSTON BEER A on October 10, 2024 and sell it today you would lose (4,670) from holding BOSTON BEER A or give up 14.8% of portfolio value over 90 days.

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

GRENKELEASING Dusseldorf  vs.  BOSTON BEER A

GRENKELEASING Duss

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRENKELEASING Dusseldorf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BOSTON BEER A

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BOSTON BEER A are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, BOSTON BEER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GRENKELEASING and BOSTON BEER

The main advantage of trading using opposite GRENKELEASING and BOSTON BEER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRENKELEASING 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 GRENKELEASING Dusseldorf and BOSTON BEER A 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.