Correlation Between National Beverage and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both National Beverage and HYDROFARM HLD 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 HYDROFARM HLD 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 HYDROFARM HLD GRP, you can compare the effects of market volatilities on National Beverage and HYDROFARM HLD 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 HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and HYDROFARM HLD.
Diversification Opportunities for National Beverage and HYDROFARM HLD
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and HYDROFARM is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and HYDROFARM HLD GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROFARM HLD GRP 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 HYDROFARM HLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROFARM HLD GRP has no effect on the direction of National Beverage i.e., National Beverage and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between National Beverage and HYDROFARM HLD
Assuming the 90 days horizon National Beverage Corp is expected to generate 0.27 times more return on investment than HYDROFARM HLD. However, National Beverage Corp is 3.68 times less risky than HYDROFARM HLD. It trades about 0.19 of its potential returns per unit of risk. HYDROFARM HLD GRP is currently generating about 0.02 per unit of risk. If you would invest 4,180 in National Beverage Corp on August 29, 2024 and sell it today you would earn a total of 320.00 from holding National Beverage Corp or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. HYDROFARM HLD GRP
Performance |
| Timeline |
| National Beverage Corp |
| HYDROFARM HLD GRP |
National Beverage and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and HYDROFARM HLD
The main advantage of trading using opposite National Beverage and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, HYDROFARM HLD 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 HYDROFARM HLD will offset losses from the drop in HYDROFARM HLD's long position.| National Beverage vs. CEOTRONICS | National Beverage vs. Platinum Investment Management | National Beverage vs. Perdoceo Education | National Beverage vs. ANTA SPORTS PRODUCT |
| HYDROFARM HLD vs. Superior Plus Corp | HYDROFARM HLD vs. NMI Holdings | HYDROFARM HLD vs. Origin Agritech | HYDROFARM HLD vs. SIVERS SEMICONDUCTORS AB |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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