Correlation Between National Beverage and Materialise
Can any of the company-specific risk be diversified away by investing in both National Beverage and Materialise 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 Materialise 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 Materialise NV, you can compare the effects of market volatilities on National Beverage and Materialise 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 Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Materialise.
Diversification Opportunities for National Beverage and Materialise
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between National and Materialise is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV 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 Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of National Beverage i.e., National Beverage and Materialise go up and down completely randomly.
Pair Corralation between National Beverage and Materialise
Assuming the 90 days horizon National Beverage Corp is expected to generate 0.62 times more return on investment than Materialise. However, National Beverage Corp is 1.61 times less risky than Materialise. It trades about 0.02 of its potential returns per unit of risk. Materialise NV is currently generating about 0.01 per unit of risk. If you would invest 3,975 in National Beverage Corp on September 23, 2024 and sell it today you would earn a total of 385.00 from holding National Beverage Corp or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Materialise NV
Performance |
| Timeline |
| National Beverage Corp |
| Materialise NV |
National Beverage and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Materialise
The main advantage of trading using opposite National Beverage and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Materialise 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 Materialise will offset losses from the drop in Materialise's long position.| National Beverage vs. Tsingtao Brewery | National Beverage vs. NORTHEAST UTILITIES | National Beverage vs. THAI BEVERAGE | National Beverage vs. BOSTON BEER A |
| Materialise vs. NEWELL RUBBERMAID | Materialise vs. National Beverage Corp | Materialise vs. VULCAN MATERIALS | Materialise vs. Thai Beverage Public |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |