Correlation Between National Beverage and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both National Beverage and GREENX METALS 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 GREENX METALS 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 GREENX METALS LTD, you can compare the effects of market volatilities on National Beverage and GREENX METALS 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 GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and GREENX METALS.
Diversification Opportunities for National Beverage and GREENX METALS
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and GREENX is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD 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 GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of National Beverage i.e., National Beverage and GREENX METALS go up and down completely randomly.
Pair Corralation between National Beverage and GREENX METALS
Assuming the 90 days horizon National Beverage Corp is expected to under-perform the GREENX METALS. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 2.3 times less risky than GREENX METALS. The stock trades about -0.1 of its potential returns per unit of risk. The GREENX METALS LTD is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 39.00 in GREENX METALS LTD on October 22, 2024 and sell it today you would earn a total of 4.00 from holding GREENX METALS LTD or generate 10.26% 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. GREENX METALS LTD
Performance |
| Timeline |
| National Beverage Corp |
| GREENX METALS LTD |
National Beverage and GREENX METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and GREENX METALS
The main advantage of trading using opposite National Beverage and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS's long position.| National Beverage vs. PLAYTECH | National Beverage vs. SLR Investment Corp | National Beverage vs. CHRYSALIS INVESTMENTS LTD | National Beverage vs. TRAVEL LEISURE DL 01 |
| GREENX METALS vs. United Breweries Co | GREENX METALS vs. THAI BEVERAGE | GREENX METALS vs. HK Electric Investments | GREENX METALS 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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