Correlation Between Inflection Point and Boston Beer

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

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

Diversification Opportunities for Inflection Point and Boston Beer

0.27

Correlation Coefficient

Inflection Point  Boston Beer

Modest diversification

The 3 months correlation between Inflection and Boston is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and Inflection Point 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 Inflection Point Acquisition 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 Inflection Point i.e., Inflection Point and Boston Beer go up and down completely randomly.

Pair Corralation between Inflection Point and Boston Beer

Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 1.45 times more return on investment than Boston Beer. However, Inflection Point is 1.45 times more volatile than Boston Beer. It trades about 0.07 of its potential returns per unit of risk. Boston Beer is currently generating about 0.01 per unit of risk. If you would invest  1,063  in Inflection Point Acquisition on September 29, 2024 and sell it today you would earn a total of  192.00  from holding Inflection Point Acquisition or generate 18.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Inflection Point Acquisition  vs.  Boston Beer

Inflection Point Acq

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

Boston Beer

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Beer are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Inflection Point and Boston Beer

The main advantage of trading using opposite Inflection Point and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point 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 Inflection Point Acquisition 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.