Correlation Between Boston Beer and Ford
Can any of the company-specific risk be diversified away by investing in both Boston Beer and Ford 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 Ford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Ford Motor, you can compare the effects of market volatilities on Boston Beer and Ford 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 Ford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Ford.
Diversification Opportunities for Boston Beer and Ford
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Boston and Ford is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Ford Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor 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 Ford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Motor has no effect on the direction of Boston Beer i.e., Boston Beer and Ford go up and down completely randomly.
Pair Corralation between Boston Beer and Ford
Considering the 90-day investment horizon Boston Beer is expected to under-perform the Ford. But the stock apears to be less risky and, when comparing its historical volatility, Boston Beer is 1.11 times less risky than Ford. The stock trades about -0.09 of its potential returns per unit of risk. The Ford Motor is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,156 in Ford Motor on September 6, 2025 and sell it today you would earn a total of 147.00 from holding Ford Motor or generate 12.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Ford Motor
Performance |
| Timeline |
| Boston Beer |
| Ford Motor |
Boston Beer and Ford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Ford
The main advantage of trading using opposite Boston Beer and Ford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, Ford 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 Ford will offset losses from the drop in Ford's long position.| Boston Beer vs. Big Rock Brewery | Boston Beer vs. Molson Coors Canada | Boston Beer vs. Molson Coors Canada | Boston Beer vs. Anheuser Busch Inbev |
| Ford vs. Bangkok Dusit Medical | Ford vs. AeroVironment | Ford vs. Tata Steel Limited | Ford vs. American Medical Technologies |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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