Correlation Between Boston Beer and 04686JAE1

Can any of the company-specific risk be diversified away by investing in both Boston Beer and 04686JAE1 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 04686JAE1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boston Beer and ATH 345 15 MAY 52, you can compare the effects of market volatilities on Boston Beer and 04686JAE1 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 04686JAE1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and 04686JAE1.

Diversification Opportunities for Boston Beer and 04686JAE1

0.24

Correlation Coefficient

Boston Beer  04686JAE1

Modest diversification

The 3 months correlation between Boston and 04686JAE1 is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and ATH 345 15 MAY 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATH 345 15 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 04686JAE1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATH 345 15 has no effect on the direction of Boston Beer i.e., Boston Beer and 04686JAE1 go up and down completely randomly.

Pair Corralation between Boston Beer and 04686JAE1

Considering the 90-day investment horizon Boston Beer is expected to under-perform the 04686JAE1. In addition to that, Boston Beer is 1.05 times more volatile than ATH 345 15 MAY 52. It trades about -0.06 of its total potential returns per unit of risk. ATH 345 15 MAY 52 is currently generating about 0.03 per unit of volatility. If you would invest  6,482  in ATH 345 15 MAY 52 on October 25, 2024 and sell it today you would earn a total of  266.00  from holding ATH 345 15 MAY 52 or generate 4.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.68%
Values	Daily Returns

Boston Beer  vs.  ATH 345 15 MAY 52

Boston Beer

Risk-Adjusted Performance

0 of 100

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 February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ATH 345 15

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ATH 345 15 MAY 52 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 04686JAE1 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Boston Beer and 04686JAE1

The main advantage of trading using opposite Boston Beer and 04686JAE1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, 04686JAE1 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 04686JAE1 will offset losses from the drop in 04686JAE1's long position.

The idea behind Boston Beer and ATH 345 15 MAY 52 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..