Correlation Between Boston Beer and Semper Paratus

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

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

Diversification Opportunities for Boston Beer and Semper Paratus

0.3

Correlation Coefficient

Boston Beer  Semper Paratus

Weak diversification

The 3 months correlation between Boston and Semper is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Semper Paratus Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semper Paratus Acqui 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 Semper Paratus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semper Paratus Acqui has no effect on the direction of Boston Beer i.e., Boston Beer and Semper Paratus go up and down completely randomly.

Pair Corralation between Boston Beer and Semper Paratus

Considering the 90-day investment horizon Boston Beer is expected to generate 7.53 times less return on investment than Semper Paratus. In addition to that, Boston Beer is 2.03 times more volatile than Semper Paratus Acquisition. It trades about 0.0 of its total potential returns per unit of risk. Semper Paratus Acquisition is currently generating about 0.05 per unit of volatility. If you would invest  1,025  in Semper Paratus Acquisition on September 5, 2024 and sell it today you would earn a total of  74.00  from holding Semper Paratus Acquisition or generate 7.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	30.51%
Values	Daily Returns

Boston Beer  vs.  Semper Paratus Acquisition

Boston Beer

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Beer are ranked lower than 8 (%) 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 January 2025.

Semper Paratus Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Semper Paratus Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Semper Paratus is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Boston Beer and Semper Paratus

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

The idea behind Boston Beer and Semper Paratus Acquisition 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.