Correlation Between Boston Beer and Saia

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

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

Diversification Opportunities for Boston Beer and Saia

0.82

Correlation Coefficient

Boston Beer  Saia

Very poor diversification

The 3 months correlation between Boston and Saia is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia Inc 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 Saia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saia Inc has no effect on the direction of Boston Beer i.e., Boston Beer and Saia go up and down completely randomly.

Pair Corralation between Boston Beer and Saia

Considering the 90-day investment horizon Boston Beer is expected to under-perform the Saia. But the stock apears to be less risky and, when comparing its historical volatility, Boston Beer is 1.38 times less risky than Saia. The stock trades about -0.01 of its potential returns per unit of risk. The Saia Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  45,786  in Saia Inc on September 20, 2024 and sell it today you would earn a total of  7,497  from holding Saia Inc or generate 16.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.6%
Values	Daily Returns

Boston Beer  vs.  Saia Inc

Boston Beer

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Beer are ranked lower than 10 (%) 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 January 2025.

Saia Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saia Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent forward indicators, Saia sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boston Beer and Saia

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

The idea behind Boston Beer and Saia Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.