Correlation Between National Beverage and Vossloh AG
Can any of the company-specific risk be diversified away by investing in both National Beverage and Vossloh AG 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 Vossloh AG 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 Vossloh AG, you can compare the effects of market volatilities on National Beverage and Vossloh AG 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 Vossloh AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Vossloh AG.
Diversification Opportunities for National Beverage and Vossloh AG
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Vossloh is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Vossloh AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vossloh AG 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 Vossloh AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vossloh AG has no effect on the direction of National Beverage i.e., National Beverage and Vossloh AG go up and down completely randomly.
Pair Corralation between National Beverage and Vossloh AG
Assuming the 90 days horizon National Beverage Corp is expected to under-perform the Vossloh AG. In addition to that, National Beverage is 1.64 times more volatile than Vossloh AG. It trades about -0.04 of its total potential returns per unit of risk. Vossloh AG is currently generating about 0.02 per unit of volatility. If you would invest 4,315 in Vossloh AG on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Vossloh AG or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
National Beverage Corp vs. Vossloh AG
Performance |
| Timeline |
| National Beverage Corp |
| Vossloh AG |
National Beverage and Vossloh AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Vossloh AG
The main advantage of trading using opposite National Beverage and Vossloh AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Vossloh AG 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 Vossloh AG will offset losses from the drop in Vossloh AG'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 |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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