Correlation Between BOSTON BEER and Renesas Electronics

Can any of the company-specific risk be diversified away by investing in both BOSTON BEER and Renesas Electronics 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 Renesas Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BOSTON BEER A and Renesas Electronics, you can compare the effects of market volatilities on BOSTON BEER and Renesas Electronics 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 Renesas Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOSTON BEER and Renesas Electronics.

Diversification Opportunities for BOSTON BEER and Renesas Electronics

0.0

Correlation Coefficient

BOSTON BEER  Renesas Electronics

Pay attention - limited upside

The 3 months correlation between BOSTON and Renesas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BOSTON BEER A and Renesas Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renesas Electronics 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 A are associated (or correlated) with Renesas Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renesas Electronics has no effect on the direction of BOSTON BEER i.e., BOSTON BEER and Renesas Electronics go up and down completely randomly.

Pair Corralation between BOSTON BEER and Renesas Electronics

Assuming the 90 days trading horizon BOSTON BEER A is expected to under-perform the Renesas Electronics. But the stock apears to be less risky and, when comparing its historical volatility, BOSTON BEER A is 1.48 times less risky than Renesas Electronics. The stock trades about -0.12 of its potential returns per unit of risk. The Renesas Electronics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,059  in Renesas Electronics on May 6, 2025 and sell it today you would lose (1.00) from holding Renesas Electronics or give up 0.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BOSTON BEER A   vs.  Renesas Electronics

BOSTON BEER A

Risk-Adjusted Performance

Very Weak

Over the last 90 days BOSTON BEER A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Renesas Electronics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Renesas Electronics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Renesas Electronics is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BOSTON BEER and Renesas Electronics

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

The idea behind BOSTON BEER A and Renesas Electronics 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 Transaction History module to view history of all your transactions and understand their impact on performance.