Correlation Between National Beverage and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both National Beverage and SPDR Gold 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 SPDR Gold 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 SPDR Gold Shares, you can compare the effects of market volatilities on National Beverage and SPDR Gold 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 SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and SPDR Gold.
Diversification Opportunities for National Beverage and SPDR Gold
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and SPDR is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and SPDR Gold Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold Shares 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 SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold Shares has no effect on the direction of National Beverage i.e., National Beverage and SPDR Gold go up and down completely randomly.
Pair Corralation between National Beverage and SPDR Gold
Assuming the 90 days horizon National Beverage is expected to generate 1.48 times less return on investment than SPDR Gold. In addition to that, National Beverage is 2.28 times more volatile than SPDR Gold Shares. It trades about 0.04 of its total potential returns per unit of risk. SPDR Gold Shares is currently generating about 0.15 per unit of volatility. If you would invest 17,058 in SPDR Gold Shares on September 4, 2024 and sell it today you would earn a total of 6,159 from holding SPDR Gold Shares or generate 36.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
National Beverage Corp vs. SPDR Gold Shares
Performance |
| Timeline |
| National Beverage Corp |
| SPDR Gold Shares |
National Beverage and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and SPDR Gold
The main advantage of trading using opposite National Beverage and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, SPDR Gold 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 SPDR Gold will offset losses from the drop in SPDR Gold's long position.| National Beverage vs. Bumrungrad Hospital Public | National Beverage vs. CVS Health | National Beverage vs. Plastic Omnium | National Beverage vs. United Rentals |
| SPDR Gold vs. Nordic Semiconductor ASA | SPDR Gold vs. AECOM TECHNOLOGY | SPDR Gold vs. FANDIFI TECHNOLOGY P | SPDR Gold vs. SMA Solar Technology |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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