Correlation Between National Beverage and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both National Beverage and Apollo Investment 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 Apollo Investment 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 Apollo Investment Corp, you can compare the effects of market volatilities on National Beverage and Apollo Investment 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 Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Apollo Investment.
Diversification Opportunities for National Beverage and Apollo Investment
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Apollo is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp 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 Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of National Beverage i.e., National Beverage and Apollo Investment go up and down completely randomly.
Pair Corralation between National Beverage and Apollo Investment
Assuming the 90 days horizon National Beverage Corp is expected to under-perform the Apollo Investment. In addition to that, National Beverage is 1.09 times more volatile than Apollo Investment Corp. It trades about -0.35 of its total potential returns per unit of risk. Apollo Investment Corp is currently generating about -0.1 per unit of volatility. If you would invest 1,292 in Apollo Investment Corp on October 12, 2024 and sell it today you would lose (28.00) from holding Apollo Investment Corp or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Apollo Investment Corp
Performance |
| Timeline |
| National Beverage Corp |
| Apollo Investment Corp |
National Beverage and Apollo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Apollo Investment
The main advantage of trading using opposite National Beverage and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Apollo Investment 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 Apollo Investment will offset losses from the drop in Apollo Investment's long position.| National Beverage vs. BURLINGTON STORES | National Beverage vs. Calibre Mining Corp | National Beverage vs. GREENX METALS LTD | National Beverage vs. ADRIATIC METALS LS 013355 |
| Apollo Investment vs. X FAB Silicon Foundries | Apollo Investment vs. AIR PRODCHEMICALS | Apollo Investment vs. SILICON LABORATOR | Apollo Investment vs. China BlueChemical |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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