Correlation Between Boston Beer and MQGAU

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

By analyzing existing cross correlation between Boston Beer and MQGAU 39 15 JAN 26, you can compare the effects of market volatilities on Boston Beer and MQGAU 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 MQGAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and MQGAU.

Diversification Opportunities for Boston Beer and MQGAU

0.32

Correlation Coefficient

Boston Beer  MQGAU

Weak diversification

The 3 months correlation between Boston and MQGAU is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and MQGAU 39 15 JAN 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MQGAU 15 JAN 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 MQGAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MQGAU 15 JAN has no effect on the direction of Boston Beer i.e., Boston Beer and MQGAU go up and down completely randomly.

Pair Corralation between Boston Beer and MQGAU

Considering the 90-day investment horizon Boston Beer is expected to generate 2.14 times more return on investment than MQGAU. However, Boston Beer is 2.14 times more volatile than MQGAU 39 15 JAN 26. It trades about 0.0 of its potential returns per unit of risk. MQGAU 39 15 JAN 26 is currently generating about -0.39 per unit of risk. If you would invest  27,796  in Boston Beer on October 10, 2024 and sell it today you would lose (257.00) from holding Boston Beer or give up 0.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	22.58%
Values	Daily Returns

Boston Beer  vs.  MQGAU 39 15 JAN 26

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 very healthy basic indicators, Boston Beer is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

MQGAU 15 JAN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MQGAU 39 15 JAN 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for MQGAU 39 15 JAN 26 investors.

Pair Trading with Boston Beer and MQGAU

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

The idea behind Boston Beer and MQGAU 39 15 JAN 26 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.