Correlation Between Boston Beer and QVC

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

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

Diversification Opportunities for Boston Beer and QVC

0.38

Correlation Coefficient

Boston Beer  QVC

Weak diversification

The 3 months correlation between Boston and QVC is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and QVC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QVC Group 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 QVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QVC Group has no effect on the direction of Boston Beer i.e., Boston Beer and QVC go up and down completely randomly.

Pair Corralation between Boston Beer and QVC

Considering the 90-day investment horizon Boston Beer is expected to generate 0.25 times more return on investment than QVC. However, Boston Beer is 3.98 times less risky than QVC. It trades about -0.01 of its potential returns per unit of risk. QVC Group is currently generating about 0.0 per unit of risk. If you would invest  22,855  in Boston Beer on May 28, 2025 and sell it today you would lose (491.00) from holding Boston Beer or give up 2.15% of portfolio value over 90 days.

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

Boston Beer  vs.  QVC Group

Boston Beer

Risk-Adjusted Performance

Weakest

Over the last 90 days Boston Beer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Boston Beer is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

QVC Group

Risk-Adjusted Performance

Weakest

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

Pair Trading with Boston Beer and QVC

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

The idea behind Boston Beer and QVC Group 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.