Correlation Between National Beverage and WUXI BIOLOGICS
Can any of the company-specific risk be diversified away by investing in both National Beverage and WUXI BIOLOGICS 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 WUXI BIOLOGICS 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 WUXI BIOLOGICS UNSPADR2, you can compare the effects of market volatilities on National Beverage and WUXI BIOLOGICS 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 WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and WUXI BIOLOGICS.
Diversification Opportunities for National Beverage and WUXI BIOLOGICS
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and WUXI is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and WUXI BIOLOGICS UNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS UNSPADR2 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 WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS UNSPADR2 has no effect on the direction of National Beverage i.e., National Beverage and WUXI BIOLOGICS go up and down completely randomly.
Pair Corralation between National Beverage and WUXI BIOLOGICS
Assuming the 90 days horizon National Beverage Corp is expected to generate 0.44 times more return on investment than WUXI BIOLOGICS. However, National Beverage Corp is 2.3 times less risky than WUXI BIOLOGICS. It trades about 0.03 of its potential returns per unit of risk. WUXI BIOLOGICS UNSPADR2 is currently generating about -0.04 per unit of risk. If you would invest 3,560 in National Beverage Corp on October 11, 2024 and sell it today you would earn a total of 580.00 from holding National Beverage Corp or generate 16.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. WUXI BIOLOGICS UNSPADR2
Performance |
| Timeline |
| National Beverage Corp |
| WUXI BIOLOGICS UNSPADR2 |
National Beverage and WUXI BIOLOGICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and WUXI BIOLOGICS
The main advantage of trading using opposite National Beverage and WUXI BIOLOGICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, WUXI BIOLOGICS 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 WUXI BIOLOGICS will offset losses from the drop in WUXI BIOLOGICS's long position.| National Beverage vs. Superior Plus Corp | National Beverage vs. NMI Holdings | National Beverage vs. SIVERS SEMICONDUCTORS AB | National Beverage vs. Talanx AG |
| WUXI BIOLOGICS vs. Host Hotels Resorts | WUXI BIOLOGICS vs. National Beverage Corp | WUXI BIOLOGICS vs. MTY Food Group | WUXI BIOLOGICS vs. Wyndham Hotels Resorts |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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