Correlation Between National Beverage and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both National Beverage and Advanced Medical 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 Advanced Medical 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 Advanced Medical Solutions, you can compare the effects of market volatilities on National Beverage and Advanced Medical 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 Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Advanced Medical.
Diversification Opportunities for National Beverage and Advanced Medical
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Advanced is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of National Beverage i.e., National Beverage and Advanced Medical go up and down completely randomly.
Pair Corralation between National Beverage and Advanced Medical
Assuming the 90 days trading horizon National Beverage Corp is expected to generate 0.84 times more return on investment than Advanced Medical. However, National Beverage Corp is 1.2 times less risky than Advanced Medical. It trades about 0.04 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about 0.01 per unit of risk. If you would invest 4,614 in National Beverage Corp on September 3, 2024 and sell it today you would earn a total of 348.00 from holding National Beverage Corp or generate 7.54% 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. Advanced Medical Solutions
Performance |
| Timeline |
| National Beverage Corp |
| Advanced Medical Sol |
National Beverage and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Advanced Medical
The main advantage of trading using opposite National Beverage and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical'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 |
| Advanced Medical vs. National Beverage Corp | Advanced Medical vs. Cincinnati Financial Corp | Advanced Medical vs. Qurate Retail Series | Advanced Medical vs. St Galler Kantonalbank |
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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