Correlation Between National Beverage and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both National Beverage and GreenX Metals 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 GreenX Metals 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 GreenX Metals, you can compare the effects of market volatilities on National Beverage and GreenX Metals 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 GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and GreenX Metals.
Diversification Opportunities for National Beverage and GreenX Metals
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and GreenX is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals 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 GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of National Beverage i.e., National Beverage and GreenX Metals go up and down completely randomly.
Pair Corralation between National Beverage and GreenX Metals
Assuming the 90 days trading horizon National Beverage Corp is expected to generate 0.69 times more return on investment than GreenX Metals. However, National Beverage Corp is 1.45 times less risky than GreenX Metals. It trades about 0.24 of its potential returns per unit of risk. GreenX Metals is currently generating about -0.3 per unit of risk. If you would invest 4,527 in National Beverage Corp on August 30, 2024 and sell it today you would earn a total of 420.00 from holding National Beverage Corp or generate 9.28% 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. GreenX Metals
Performance |
| Timeline |
| National Beverage Corp |
| GreenX Metals |
National Beverage and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and GreenX Metals
The main advantage of trading using opposite National Beverage and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| National Beverage vs. Tungsten West PLC | National Beverage vs. Argo Group Limited | National Beverage vs. Hardide PLC | National Beverage vs. Versarien PLC |
| GreenX Metals vs. Givaudan SA | GreenX Metals vs. Antofagasta PLC | GreenX Metals vs. Centamin PLC | GreenX Metals vs. Atalaya Mining |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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