Correlation Between National Beverage and Stora Enso
Can any of the company-specific risk be diversified away by investing in both National Beverage and Stora Enso 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 Stora Enso 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 Stora Enso Oyj, you can compare the effects of market volatilities on National Beverage and Stora Enso 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 Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Stora Enso.
Diversification Opportunities for National Beverage and Stora Enso
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Stora is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj 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 Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of National Beverage i.e., National Beverage and Stora Enso go up and down completely randomly.
Pair Corralation between National Beverage and Stora Enso
Assuming the 90 days horizon National Beverage Corp is expected to under-perform the Stora Enso. In addition to that, National Beverage is 1.68 times more volatile than Stora Enso Oyj. It trades about -0.07 of its total potential returns per unit of risk. Stora Enso Oyj is currently generating about 0.05 per unit of volatility. If you would invest 962.00 in Stora Enso Oyj on September 14, 2024 and sell it today you would earn a total of 10.00 from holding Stora Enso Oyj or generate 1.04% 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. Stora Enso Oyj
Performance |
| Timeline |
| National Beverage Corp |
| Stora Enso Oyj |
National Beverage and Stora Enso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Stora Enso
The main advantage of trading using opposite National Beverage and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso'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 |
| Stora Enso vs. STMICROELECTRONICS | Stora Enso vs. PT Global Mediacom | Stora Enso vs. Arrow Electronics | Stora Enso vs. PLAYSTUDIOS A DL 0001 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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