Correlation Between ZJK Industrial and Boston Beer

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

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

Diversification Opportunities for ZJK Industrial and Boston Beer

-0.07

Correlation Coefficient

ZJK Industrial  Boston Beer

Good diversification

The 3 months correlation between ZJK and Boston is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ZJK Industrial Co, and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and ZJK Industrial 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 ZJK Industrial Co, are associated (or correlated) with Boston Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Beer has no effect on the direction of ZJK Industrial i.e., ZJK Industrial and Boston Beer go up and down completely randomly.

Pair Corralation between ZJK Industrial and Boston Beer

Considering the 90-day investment horizon ZJK Industrial Co, is expected to generate 14.82 times more return on investment than Boston Beer. However, ZJK Industrial is 14.82 times more volatile than Boston Beer. It trades about 0.12 of its potential returns per unit of risk. Boston Beer is currently generating about -0.21 per unit of risk. If you would invest  449.00  in ZJK Industrial Co, on October 26, 2024 and sell it today you would earn a total of  454.00  from holding ZJK Industrial Co, or generate 101.11% return on investment over 90 days.

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

ZJK Industrial Co,  vs.  Boston Beer

ZJK Industrial Co,

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZJK Industrial Co, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking indicators, ZJK Industrial disclosed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with ZJK Industrial and Boston Beer

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

The idea behind ZJK Industrial Co, and Boston Beer 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.