Correlation Between IBEX Technologies and Boston Beer

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

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

Diversification Opportunities for IBEX Technologies and Boston Beer

0.22

Correlation Coefficient

IBEX Technologies  Boston Beer

Modest diversification

The 3 months correlation between IBEX and Boston is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding IBEX Technologies and The Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and IBEX Technologies 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 IBEX Technologies 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 IBEX Technologies i.e., IBEX Technologies and Boston Beer go up and down completely randomly.

Pair Corralation between IBEX Technologies and Boston Beer

Assuming the 90 days horizon IBEX Technologies is expected to generate 20.2 times more return on investment than Boston Beer. However, IBEX Technologies is 20.2 times more volatile than The Boston Beer. It trades about 0.05 of its potential returns per unit of risk. The Boston Beer is currently generating about -0.03 per unit of risk. If you would invest  53.00  in IBEX Technologies on October 24, 2024 and sell it today you would earn a total of  70,747  from holding IBEX Technologies or generate 133484.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

IBEX Technologies  vs.  The Boston Beer

IBEX Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IBEX Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IBEX Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with IBEX Technologies and Boston Beer

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

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.