Correlation Between National Beverage and Evolent Health
Can any of the company-specific risk be diversified away by investing in both National Beverage and Evolent Health 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 Evolent Health 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 Evolent Health, you can compare the effects of market volatilities on National Beverage and Evolent Health 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 Evolent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Evolent Health.
Diversification Opportunities for National Beverage and Evolent Health
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Evolent is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Evolent Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolent Health 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 Evolent Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolent Health has no effect on the direction of National Beverage i.e., National Beverage and Evolent Health go up and down completely randomly.
Pair Corralation between National Beverage and Evolent Health
Assuming the 90 days horizon National Beverage Corp is expected to generate 0.19 times more return on investment than Evolent Health. However, National Beverage Corp is 5.21 times less risky than Evolent Health. It trades about 0.29 of its potential returns per unit of risk. Evolent Health is currently generating about -0.2 per unit of risk. If you would invest 4,160 in National Beverage Corp on September 3, 2024 and sell it today you would earn a total of 500.00 from holding National Beverage Corp or generate 12.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Evolent Health
Performance |
| Timeline |
| National Beverage Corp |
| Evolent Health |
National Beverage and Evolent Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Evolent Health
The main advantage of trading using opposite National Beverage and Evolent Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Evolent Health 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 Evolent Health will offset losses from the drop in Evolent Health's long position.| National Beverage vs. HK Electric Investments | National Beverage vs. United Utilities Group | National Beverage vs. United Internet AG | National Beverage vs. WisdomTree Investments |
| Evolent Health vs. LIFEWAY FOODS | Evolent Health vs. UNIVERSAL MUSIC GROUP | Evolent Health vs. National Beverage Corp | Evolent Health vs. The Boston Beer |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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