Correlation Between National Beverage and New Residential
Can any of the company-specific risk be diversified away by investing in both National Beverage and New Residential 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 New Residential 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 New Residential Investment, you can compare the effects of market volatilities on National Beverage and New Residential 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 New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and New Residential.
Diversification Opportunities for National Beverage and New Residential
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and New is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and New Residential Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Residential Inve 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 New Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Residential Inve has no effect on the direction of National Beverage i.e., National Beverage and New Residential go up and down completely randomly.
Pair Corralation between National Beverage and New Residential
Assuming the 90 days horizon National Beverage Corp is expected to under-perform the New Residential. In addition to that, National Beverage is 2.11 times more volatile than New Residential Investment. It trades about -0.07 of its total potential returns per unit of risk. New Residential Investment is currently generating about 0.21 per unit of volatility. If you would invest 1,017 in New Residential Investment on September 14, 2024 and sell it today you would earn a total of 44.00 from holding New Residential Investment or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. New Residential Investment
Performance |
| Timeline |
| National Beverage Corp |
| New Residential Inve |
National Beverage and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and New Residential
The main advantage of trading using opposite National Beverage and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, New Residential 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 New Residential will offset losses from the drop in New Residential's long position.| National Beverage vs. Superior Plus Corp | National Beverage vs. SIVERS SEMICONDUCTORS AB | National Beverage vs. NorAm Drilling AS | National Beverage vs. Norsk Hydro ASA |
| New Residential vs. ATRYS HEALTH SA | New Residential vs. EHEALTH | New Residential vs. Natural Health Trends | New Residential vs. National Beverage Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |