Correlation Between National Beverage and Aflac Incorporated
Can any of the company-specific risk be diversified away by investing in both National Beverage and Aflac Incorporated 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 Aflac Incorporated 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 Aflac Incorporated, you can compare the effects of market volatilities on National Beverage and Aflac Incorporated 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 Aflac Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Aflac Incorporated.
Diversification Opportunities for National Beverage and Aflac Incorporated
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Aflac is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Aflac Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aflac Incorporated 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 Aflac Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aflac Incorporated has no effect on the direction of National Beverage i.e., National Beverage and Aflac Incorporated go up and down completely randomly.
Pair Corralation between National Beverage and Aflac Incorporated
Assuming the 90 days horizon National Beverage Corp is expected to generate 1.49 times more return on investment than Aflac Incorporated. However, National Beverage is 1.49 times more volatile than Aflac Incorporated. It trades about -0.04 of its potential returns per unit of risk. Aflac Incorporated is currently generating about -0.15 per unit of risk. If you would invest 4,640 in National Beverage Corp on September 13, 2024 and sell it today you would lose (100.00) from holding National Beverage Corp or give up 2.16% 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. Aflac Incorporated
Performance |
| Timeline |
| National Beverage Corp |
| Aflac Incorporated |
National Beverage and Aflac Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Aflac Incorporated
The main advantage of trading using opposite National Beverage and Aflac Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Aflac Incorporated 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 Aflac Incorporated will offset losses from the drop in Aflac Incorporated's long position.| National Beverage vs. Superior Plus Corp | National Beverage vs. SIVERS SEMICONDUCTORS AB | National Beverage vs. NorAm Drilling AS | National Beverage vs. Norsk Hydro ASA |
| Aflac Incorporated vs. CENTURIA OFFICE REIT | Aflac Incorporated vs. Warner Music Group | Aflac Incorporated vs. WisdomTree Investments | Aflac Incorporated vs. Corporate Office Properties |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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