Correlation Between National Beverage and Bell Food
Can any of the company-specific risk be diversified away by investing in both National Beverage and Bell Food 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 Bell Food 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 Bell Food Group, you can compare the effects of market volatilities on National Beverage and Bell Food 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 Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Bell Food.
Diversification Opportunities for National Beverage and Bell Food
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Bell is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Bell Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Food Group 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 Bell Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Food Group has no effect on the direction of National Beverage i.e., National Beverage and Bell Food go up and down completely randomly.
Pair Corralation between National Beverage and Bell Food
Assuming the 90 days trading horizon National Beverage Corp is expected to generate 3.17 times more return on investment than Bell Food. However, National Beverage is 3.17 times more volatile than Bell Food Group. It trades about 0.26 of its potential returns per unit of risk. Bell Food Group is currently generating about -0.05 per unit of risk. If you would invest 4,510 in National Beverage Corp on September 2, 2024 and sell it today you would earn a total of 452.00 from holding National Beverage Corp or generate 10.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Bell Food Group
Performance |
| Timeline |
| National Beverage Corp |
| Bell Food Group |
National Beverage and Bell Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Bell Food
The main advantage of trading using opposite National Beverage and Bell Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Bell Food 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 Bell Food will offset losses from the drop in Bell Food's long position.| National Beverage vs. Uniper SE | National Beverage vs. Mulberry Group PLC | National Beverage vs. London Security Plc | National Beverage vs. Triad Group PLC |
| Bell Food vs. Infrastrutture Wireless Italiane | Bell Food vs. Alaska Air Group | Bell Food vs. Ryanair Holdings plc | Bell Food vs. Sabre Insurance Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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