Correlation Between National Beverage and CI GAMES
Can any of the company-specific risk be diversified away by investing in both National Beverage and CI GAMES 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 CI GAMES 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 CI GAMES SA, you can compare the effects of market volatilities on National Beverage and CI GAMES 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 CI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and CI GAMES.
Diversification Opportunities for National Beverage and CI GAMES
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and CI7 is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and CI GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI GAMES 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 CI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI GAMES SA has no effect on the direction of National Beverage i.e., National Beverage and CI GAMES go up and down completely randomly.
Pair Corralation between National Beverage and CI GAMES
Assuming the 90 days horizon National Beverage Corp is expected to generate 0.46 times more return on investment than CI GAMES. However, National Beverage Corp is 2.18 times less risky than CI GAMES. It trades about 0.01 of its potential returns per unit of risk. CI GAMES SA is currently generating about -0.01 per unit of risk. If you would invest 4,209 in National Beverage Corp on October 17, 2024 and sell it today you would earn a total of 31.00 from holding National Beverage Corp or generate 0.74% 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. CI GAMES SA
Performance |
| Timeline |
| National Beverage Corp |
| CI GAMES SA |
National Beverage and CI GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and CI GAMES
The main advantage of trading using opposite National Beverage and CI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, CI GAMES 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 CI GAMES will offset losses from the drop in CI GAMES's long position.| National Beverage vs. THAI BEVERAGE | National Beverage vs. GAMING FAC SA | National Beverage vs. SAN MIGUEL BREWERY | National Beverage vs. GAMES OPERATORS SA |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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