Correlation Between Celestica and Boston Beer
Can any of the company-specific risk be diversified away by investing in both Celestica 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 Celestica and Boston Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestica and Boston Beer, you can compare the effects of market volatilities on Celestica 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 Celestica with a short position of Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and Boston Beer.
Diversification Opportunities for Celestica and Boston Beer
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Celestica and Boston is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and Celestica 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 Celestica 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 Celestica i.e., Celestica and Boston Beer go up and down completely randomly.
Pair Corralation between Celestica and Boston Beer
Considering the 90-day investment horizon Celestica is expected to generate 2.36 times more return on investment than Boston Beer. However, Celestica is 2.36 times more volatile than Boston Beer. It trades about 0.29 of its potential returns per unit of risk. Boston Beer is currently generating about 0.1 per unit of risk. If you would invest 4,999 in Celestica on September 24, 2024 and sell it today you would earn a total of 4,546 from holding Celestica or generate 90.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Celestica vs. Boston Beer
Performance |
Timeline |
Celestica |
Boston Beer |
Celestica and Boston Beer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Celestica and Boston Beer
The main advantage of trading using opposite Celestica and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestica 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.Celestica vs. Rigetti Computing | Celestica vs. Quantum Computing | Celestica vs. IONQ Inc | Celestica vs. Quantum |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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