Correlation Between National Beverage and COFACE SA
Can any of the company-specific risk be diversified away by investing in both National Beverage and COFACE SA 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 COFACE SA 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 COFACE SA, you can compare the effects of market volatilities on National Beverage and COFACE SA 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 COFACE SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and COFACE SA.
Diversification Opportunities for National Beverage and COFACE SA
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and COFACE is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and COFACE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFACE SA 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 COFACE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFACE SA has no effect on the direction of National Beverage i.e., National Beverage and COFACE SA go up and down completely randomly.
Pair Corralation between National Beverage and COFACE SA
Assuming the 90 days horizon National Beverage Corp is expected to generate 1.32 times more return on investment than COFACE SA. However, National Beverage is 1.32 times more volatile than COFACE SA. It trades about 0.01 of its potential returns per unit of risk. COFACE SA is currently generating about -0.01 per unit of risk. If you would invest 4,100 in National Beverage Corp on October 12, 2024 and sell it today you would earn a total of 20.00 from holding National Beverage Corp or generate 0.49% 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. COFACE SA
Performance |
| Timeline |
| National Beverage Corp |
| COFACE SA |
National Beverage and COFACE SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and COFACE SA
The main advantage of trading using opposite National Beverage and COFACE SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, COFACE SA 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 COFACE SA will offset losses from the drop in COFACE SA'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 |
| COFACE SA vs. AEGEAN AIRLINES | COFACE SA vs. Sixt Leasing SE | COFACE SA vs. Clean Energy Fuels | COFACE SA vs. International Consolidated Airlines |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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