Correlation Between Ambea AB and National Beverage
Can any of the company-specific risk be diversified away by investing in both Ambea AB and National Beverage 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 Ambea AB and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambea AB and National Beverage Corp, you can compare the effects of market volatilities on Ambea AB and National Beverage 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 Ambea AB with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambea AB and National Beverage.
Diversification Opportunities for Ambea AB and National Beverage
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ambea and National is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ambea AB and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp and Ambea AB 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 Ambea AB are associated (or correlated) with National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Ambea AB i.e., Ambea AB and National Beverage go up and down completely randomly.
Pair Corralation between Ambea AB and National Beverage
Assuming the 90 days horizon Ambea AB is expected to generate 1.52 times more return on investment than National Beverage. However, Ambea AB is 1.52 times more volatile than National Beverage Corp. It trades about -0.08 of its potential returns per unit of risk. National Beverage Corp is currently generating about -0.21 per unit of risk. If you would invest 832.00 in Ambea AB on October 23, 2024 and sell it today you would lose (32.00) from holding Ambea AB or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Ambea AB vs. National Beverage Corp
Performance |
| Timeline |
| Ambea AB |
| National Beverage Corp |
Ambea AB and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambea AB and National Beverage
The main advantage of trading using opposite Ambea AB and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambea AB position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| Ambea AB vs. VELA TECHNOLPLC LS 0001 | Ambea AB vs. AEGEAN AIRLINES | Ambea AB vs. Aegean Airlines SA | Ambea AB vs. PKSHA TECHNOLOGY INC |
| National Beverage vs. Fair Isaac Corp | National Beverage vs. X FAB Silicon Foundries | National Beverage vs. Alaska Air Group | National Beverage vs. DXC Technology Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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