Correlation Between National Beverage and Rubis SCA
Can any of the company-specific risk be diversified away by investing in both National Beverage and Rubis SCA 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 Rubis SCA 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 Rubis SCA, you can compare the effects of market volatilities on National Beverage and Rubis SCA 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 Rubis SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Rubis SCA.
Diversification Opportunities for National Beverage and Rubis SCA
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Rubis is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Rubis SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubis SCA 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 Rubis SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubis SCA has no effect on the direction of National Beverage i.e., National Beverage and Rubis SCA go up and down completely randomly.
Pair Corralation between National Beverage and Rubis SCA
Assuming the 90 days horizon National Beverage is expected to generate 1.49 times less return on investment than Rubis SCA. In addition to that, National Beverage is 1.06 times more volatile than Rubis SCA. It trades about 0.02 of its total potential returns per unit of risk. Rubis SCA is currently generating about 0.04 per unit of volatility. If you would invest 1,990 in Rubis SCA on September 23, 2024 and sell it today you would earn a total of 290.00 from holding Rubis SCA or generate 14.57% 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. Rubis SCA
Performance |
| Timeline |
| National Beverage Corp |
| Rubis SCA |
National Beverage and Rubis SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Rubis SCA
The main advantage of trading using opposite National Beverage and Rubis SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Rubis SCA 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 Rubis SCA will offset losses from the drop in Rubis SCA's long position.| National Beverage vs. Tsingtao Brewery | National Beverage vs. NORTHEAST UTILITIES | National Beverage vs. THAI BEVERAGE | National Beverage vs. BOSTON BEER A |
| Rubis SCA vs. National Beverage Corp | Rubis SCA vs. Ebro Foods SA | Rubis SCA vs. THAI BEVERAGE | Rubis SCA vs. EBRO FOODS |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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