Correlation Between COFCO Joycome and National Beverage
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and National Beverage 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 COFCO Joycome and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and National Beverage Corp, you can compare the effects of market volatilities on COFCO Joycome and National Beverage 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 COFCO Joycome with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and National Beverage.
Diversification Opportunities for COFCO Joycome and National Beverage
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COFCO and National is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and National Beverage go up and down completely randomly.
Pair Corralation between COFCO Joycome and National Beverage
Assuming the 90 days horizon COFCO Joycome is expected to generate 7.89 times less return on investment than National Beverage. In addition to that, COFCO Joycome is 1.81 times more volatile than National Beverage Corp. It trades about 0.0 of its total potential returns per unit of risk. National Beverage Corp is currently generating about 0.03 per unit of volatility. If you would invest 4,042 in National Beverage Corp on September 14, 2024 and sell it today you would earn a total of 438.00 from holding National Beverage Corp or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. National Beverage Corp
Performance |
| Timeline |
| COFCO Joycome Foods |
| National Beverage Corp |
COFCO Joycome and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and National Beverage
The main advantage of trading using opposite COFCO Joycome and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. SIVERS SEMICONDUCTORS AB | COFCO Joycome vs. NorAm Drilling AS |
| National Beverage vs. Superior Plus Corp | National Beverage vs. SIVERS SEMICONDUCTORS AB | National Beverage vs. NorAm Drilling AS | National Beverage vs. Norsk Hydro ASA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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