Correlation Between National Beverage and SHIN ETSU
Can any of the company-specific risk be diversified away by investing in both National Beverage and SHIN ETSU 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 SHIN ETSU 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 SHIN ETSU CHEMICAL , you can compare the effects of market volatilities on National Beverage and SHIN ETSU 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 SHIN ETSU. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and SHIN ETSU.
Diversification Opportunities for National Beverage and SHIN ETSU
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and SHIN is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and SHIN ETSU CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIN ETSU CHEMICAL 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 SHIN ETSU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIN ETSU CHEMICAL has no effect on the direction of National Beverage i.e., National Beverage and SHIN ETSU go up and down completely randomly.
Pair Corralation between National Beverage and SHIN ETSU
Assuming the 90 days horizon National Beverage Corp is expected to generate 1.35 times more return on investment than SHIN ETSU. However, National Beverage is 1.35 times more volatile than SHIN ETSU CHEMICAL . It trades about 0.29 of its potential returns per unit of risk. SHIN ETSU CHEMICAL is currently generating about 0.14 per unit of risk. If you would invest 4,160 in National Beverage Corp on September 3, 2024 and sell it today you would earn a total of 500.00 from holding National Beverage Corp or generate 12.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. SHIN ETSU CHEMICAL
Performance |
| Timeline |
| National Beverage Corp |
| SHIN ETSU CHEMICAL |
National Beverage and SHIN ETSU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and SHIN ETSU
The main advantage of trading using opposite National Beverage and SHIN ETSU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, SHIN ETSU 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 SHIN ETSU will offset losses from the drop in SHIN ETSU's long position.| National Beverage vs. HK Electric Investments | National Beverage vs. United Utilities Group | National Beverage vs. United Internet AG | National Beverage vs. WisdomTree Investments |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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