Correlation Between National Beverage and METALL ZUG
Can any of the company-specific risk be diversified away by investing in both National Beverage and METALL ZUG 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 National Beverage and METALL ZUG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Beverage Corp and METALL ZUG AG, you can compare the effects of market volatilities on National Beverage and METALL ZUG 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 National Beverage with a short position of METALL ZUG. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and METALL ZUG.
Diversification Opportunities for National Beverage and METALL ZUG
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and METALL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and METALL ZUG AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METALL ZUG AG and National Beverage 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 National Beverage Corp are associated (or correlated) with METALL ZUG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METALL ZUG AG has no effect on the direction of National Beverage i.e., National Beverage and METALL ZUG go up and down completely randomly.
Pair Corralation between National Beverage and METALL ZUG
Assuming the 90 days trading horizon National Beverage Corp is expected to under-perform the METALL ZUG. In addition to that, National Beverage is 1.26 times more volatile than METALL ZUG AG. It trades about -0.12 of its total potential returns per unit of risk. METALL ZUG AG is currently generating about -0.09 per unit of volatility. If you would invest 117,000 in METALL ZUG AG on September 23, 2024 and sell it today you would lose (2,500) from holding METALL ZUG AG or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
National Beverage Corp vs. METALL ZUG AG
Performance |
| Timeline |
| National Beverage Corp |
| METALL ZUG AG |
National Beverage and METALL ZUG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and METALL ZUG
The main advantage of trading using opposite National Beverage and METALL ZUG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, METALL ZUG 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 METALL ZUG will offset losses from the drop in METALL ZUG's long position.| National Beverage vs. Hochschild Mining plc | National Beverage vs. Bell Food Group | National Beverage vs. Associated British Foods | National Beverage vs. European Metals Holdings |
| METALL ZUG vs. Schroders Investment Trusts | METALL ZUG vs. MoneysupermarketCom Group PLC | METALL ZUG vs. Solstad Offshore ASA | METALL ZUG vs. National Beverage Corp |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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