Correlation Between Boston Beer and 629377CE0

Can any of the company-specific risk be diversified away by investing in both Boston Beer and 629377CE0 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 629377CE0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boston Beer and NRG Energy 575, you can compare the effects of market volatilities on Boston Beer and 629377CE0 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 629377CE0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and 629377CE0.

Diversification Opportunities for Boston Beer and 629377CE0

-0.08

Correlation Coefficient

Boston Beer  629377CE0

Good diversification

The 3 months correlation between Boston and 629377CE0 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and NRG Energy 575 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRG Energy 575 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 629377CE0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRG Energy 575 has no effect on the direction of Boston Beer i.e., Boston Beer and 629377CE0 go up and down completely randomly.

Pair Corralation between Boston Beer and 629377CE0

Considering the 90-day investment horizon Boston Beer is expected to under-perform the 629377CE0. In addition to that, Boston Beer is 5.89 times more volatile than NRG Energy 575. It trades about -0.01 of its total potential returns per unit of risk. NRG Energy 575 is currently generating about 0.06 per unit of volatility. If you would invest  9,318  in NRG Energy 575 on October 6, 2024 and sell it today you would earn a total of  636.00  from holding NRG Energy 575 or generate 6.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.68%
Values	Daily Returns

Boston Beer  vs.  NRG Energy 575

Boston Beer

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Beer are ranked lower than 5 (%) 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 February 2025.

NRG Energy 575

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NRG Energy 575 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 629377CE0 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 629377CE0

The main advantage of trading using opposite Boston Beer and 629377CE0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, 629377CE0 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 629377CE0 will offset losses from the drop in 629377CE0's long position.

The idea behind Boston Beer and NRG Energy 575 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.