Correlation Between National Beverage and Gaztransport
Can any of the company-specific risk be diversified away by investing in both National Beverage and Gaztransport 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 Gaztransport 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 Gaztransport et Technigaz, you can compare the effects of market volatilities on National Beverage and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Gaztransport.
Diversification Opportunities for National Beverage and Gaztransport
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Gaztransport is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of National Beverage i.e., National Beverage and Gaztransport go up and down completely randomly.
Pair Corralation between National Beverage and Gaztransport
Assuming the 90 days trading horizon National Beverage Corp is expected to generate 1.02 times more return on investment than Gaztransport. However, National Beverage is 1.02 times more volatile than Gaztransport et Technigaz. It trades about 0.1 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.09 per unit of risk. If you would invest 4,551 in National Beverage Corp on September 3, 2024 and sell it today you would earn a total of 411.00 from holding National Beverage Corp or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Gaztransport et Technigaz
Performance |
| Timeline |
| National Beverage Corp |
| Gaztransport et Technigaz |
National Beverage and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Gaztransport
The main advantage of trading using opposite National Beverage and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| National Beverage vs. Catalyst Media Group | National Beverage vs. CATLIN GROUP | National Beverage vs. Magnora ASA | National Beverage vs. RTW Venture Fund |
| Gaztransport vs. Cairo Communication SpA | Gaztransport vs. Lundin Mining Corp | Gaztransport vs. Zegona Communications Plc | Gaztransport vs. Greenroc Mining PLC |
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 CEOs Directory module to screen CEOs from public companies around the world.
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