Correlation Between National Beverage and CEOTRONICS (CEKSG)
Can any of the company-specific risk be diversified away by investing in both National Beverage and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) 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 CEOTRONICS, you can compare the effects of market volatilities on National Beverage and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and CEOTRONICS (CEKSG).
Diversification Opportunities for National Beverage and CEOTRONICS (CEKSG)
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and CEOTRONICS is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS (CEKSG) has no effect on the direction of National Beverage i.e., National Beverage and CEOTRONICS (CEKSG) go up and down completely randomly.
Pair Corralation between National Beverage and CEOTRONICS (CEKSG)
Assuming the 90 days horizon National Beverage is expected to generate 3.81 times less return on investment than CEOTRONICS (CEKSG). But when comparing it to its historical volatility, National Beverage Corp is 1.48 times less risky than CEOTRONICS (CEKSG). It trades about 0.03 of its potential returns per unit of risk. CEOTRONICS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 330.00 in CEOTRONICS on August 31, 2024 and sell it today you would earn a total of 290.00 from holding CEOTRONICS or generate 87.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
National Beverage Corp vs. CEOTRONICS
Performance |
| Timeline |
| National Beverage Corp |
| CEOTRONICS (CEKSG) |
National Beverage and CEOTRONICS (CEKSG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and CEOTRONICS (CEKSG)
The main advantage of trading using opposite National Beverage and CEOTRONICS (CEKSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) will offset losses from the drop in CEOTRONICS (CEKSG)'s long position.| National Beverage vs. PepsiCo | National Beverage vs. Embotelladora Andina SA | National Beverage vs. Superior Plus Corp | National Beverage vs. NMI Holdings |
| CEOTRONICS (CEKSG) vs. InterContinental Hotels Group | CEOTRONICS (CEKSG) vs. CosmoSteel Holdings Limited | CEOTRONICS (CEKSG) vs. LEGACY IRON ORE | CEOTRONICS (CEKSG) vs. CECO ENVIRONMENTAL |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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