Correlation Between EVO Payments and Boston Beer

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

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

Diversification Opportunities for EVO Payments and Boston Beer

-0.51

Correlation Coefficient

EVO Payments  Boston Beer

Excellent diversification

The 3 months correlation between EVO and Boston is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding EVO Payments and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and EVO Payments 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 EVO Payments 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 EVO Payments i.e., EVO Payments and Boston Beer go up and down completely randomly.

Pair Corralation between EVO Payments and Boston Beer

If you would invest  3,399  in EVO Payments on March 1, 2024 and sell it today you would earn a total of  0.00  from holding EVO Payments or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

EVO Payments  vs.  Boston Beer

EVO Payments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EVO Payments has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, EVO Payments is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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 weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with EVO Payments and Boston Beer

The main advantage of trading using opposite EVO Payments and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVO Payments 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 EVO Payments 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.