Correlation Between Origen Resources and Boston Beer

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

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

Diversification Opportunities for Origen Resources and Boston Beer

0.9

Correlation Coefficient

Origen Resources  Boston Beer

Almost no diversification

The 3 months correlation between Origen and Boston is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Origen Resources and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and Origen Resources 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 Origen Resources 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 Origen Resources i.e., Origen Resources and Boston Beer go up and down completely randomly.

Pair Corralation between Origen Resources and Boston Beer

Assuming the 90 days horizon Origen Resources is expected to under-perform the Boston Beer. In addition to that, Origen Resources is 2.25 times more volatile than Boston Beer. It trades about -0.13 of its total potential returns per unit of risk. Boston Beer is currently generating about -0.17 per unit of volatility. If you would invest  29,815  in Boston Beer on December 28, 2024 and sell it today you would lose (5,878) from holding Boston Beer or give up 19.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	96.83%
Values	Daily Returns

Origen Resources  vs.  Boston Beer

Origen Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Origen Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic 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.

Boston Beer

Risk-Adjusted Performance

Very Weak

Over the last 90 days Boston Beer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Origen Resources and Boston Beer

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

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.