Correlation Between National Beverage and Peak Resources
Can any of the company-specific risk be diversified away by investing in both National Beverage and Peak Resources 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 Peak Resources 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 Peak Resources Limited, you can compare the effects of market volatilities on National Beverage and Peak Resources 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 Peak Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Peak Resources.
Diversification Opportunities for National Beverage and Peak Resources
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Peak is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Peak Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Resources 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 Peak Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Resources has no effect on the direction of National Beverage i.e., National Beverage and Peak Resources go up and down completely randomly.
Pair Corralation between National Beverage and Peak Resources
Assuming the 90 days horizon National Beverage Corp is expected to generate 0.25 times more return on investment than Peak Resources. However, National Beverage Corp is 3.96 times less risky than Peak Resources. It trades about 0.04 of its potential returns per unit of risk. Peak Resources Limited is currently generating about -0.03 per unit of risk. If you would invest 4,135 in National Beverage Corp on September 15, 2024 and sell it today you would earn a total of 325.00 from holding National Beverage Corp or generate 7.86% 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. Peak Resources Limited
Performance |
| Timeline |
| National Beverage Corp |
| Peak Resources |
National Beverage and Peak Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Peak Resources
The main advantage of trading using opposite National Beverage and Peak Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Peak Resources 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 Peak Resources will offset losses from the drop in Peak Resources' 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 |
| Peak Resources vs. SINGAPORE AIRLINES | Peak Resources vs. National Beverage Corp | Peak Resources vs. BOSTON BEER A | Peak Resources vs. Ramsay Health Care |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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