Correlation Between Boston Beer and Greencore Group

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

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

Diversification Opportunities for Boston Beer and Greencore Group

0.68

Correlation Coefficient

Boston Beer  Greencore Group

Poor diversification

The 3 months correlation between Boston and Greencore is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Greencore Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greencore Group PLC and Boston Beer 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 Boston Beer are associated (or correlated) with Greencore Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greencore Group PLC has no effect on the direction of Boston Beer i.e., Boston Beer and Greencore Group go up and down completely randomly.

Pair Corralation between Boston Beer and Greencore Group

Considering the 90-day investment horizon Boston Beer is expected to under-perform the Greencore Group. In addition to that, Boston Beer is 1.09 times more volatile than Greencore Group PLC. It trades about -0.22 of its total potential returns per unit of risk. Greencore Group PLC is currently generating about -0.03 per unit of volatility. If you would invest  1,040  in Greencore Group PLC on December 22, 2024 and sell it today you would lose (46.00) from holding Greencore Group PLC or give up 4.42% of portfolio value over 90 days.

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

Boston Beer  vs.  Greencore Group PLC

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.

Greencore Group PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greencore Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Greencore Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boston Beer and Greencore Group

The main advantage of trading using opposite Boston Beer and Greencore Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Greencore Group 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 Greencore Group will offset losses from the drop in Greencore Group's long position.

The idea behind Boston Beer and Greencore Group PLC 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.