Correlation Between National Beverage and Intel
Can any of the company-specific risk be diversified away by investing in both National Beverage and Intel 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 Intel 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 Intel, you can compare the effects of market volatilities on National Beverage and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Intel.
Diversification Opportunities for National Beverage and Intel
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Intel is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of National Beverage i.e., National Beverage and Intel go up and down completely randomly.
Pair Corralation between National Beverage and Intel
Assuming the 90 days horizon National Beverage is expected to generate 1.35 times less return on investment than Intel. But when comparing it to its historical volatility, National Beverage Corp is 2.13 times less risky than Intel. It trades about 0.09 of its potential returns per unit of risk. Intel is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,754 in Intel on September 12, 2024 and sell it today you would earn a total of 170.00 from holding Intel or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Intel
Performance |
| Timeline |
| National Beverage Corp |
| Intel |
National Beverage and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Intel
The main advantage of trading using opposite National Beverage and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel'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 |
| Intel vs. National Beverage Corp | Intel vs. Neinor Homes SA | Intel vs. Corporate Office Properties | Intel vs. Focus Home Interactive |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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