Correlation Between National Beverage and Catena Media
Can any of the company-specific risk be diversified away by investing in both National Beverage and Catena Media 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 Catena Media 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 Catena Media PLC, you can compare the effects of market volatilities on National Beverage and Catena Media 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 Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Catena Media.
Diversification Opportunities for National Beverage and Catena Media
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Catena is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC 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 Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of National Beverage i.e., National Beverage and Catena Media go up and down completely randomly.
Pair Corralation between National Beverage and Catena Media
Assuming the 90 days trading horizon National Beverage Corp is expected to generate 1.03 times more return on investment than Catena Media. However, National Beverage is 1.03 times more volatile than Catena Media PLC. It trades about 0.02 of its potential returns per unit of risk. Catena Media PLC is currently generating about -0.07 per unit of risk. If you would invest 4,959 in National Beverage Corp on August 30, 2024 and sell it today you would lose (12.00) from holding National Beverage Corp or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.53% |
| Values | Daily Returns |
National Beverage Corp vs. Catena Media PLC
Performance |
| Timeline |
| National Beverage Corp |
| Catena Media PLC |
National Beverage and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Catena Media
The main advantage of trading using opposite National Beverage and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Catena Media 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 Catena Media will offset losses from the drop in Catena Media's long position.| National Beverage vs. Lendinvest PLC | National Beverage vs. Neometals | National Beverage vs. Albion Technology General | National Beverage vs. Jupiter Fund Management |
| Catena Media vs. Lendinvest PLC | Catena Media vs. Neometals | Catena Media vs. Albion Technology General | Catena Media vs. Jupiter Fund Management |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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