Correlation Between FIRST SAVINGS and National Beverage
Can any of the company-specific risk be diversified away by investing in both FIRST SAVINGS 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 FIRST SAVINGS and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SAVINGS FINL and National Beverage Corp, you can compare the effects of market volatilities on FIRST SAVINGS 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 FIRST SAVINGS with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SAVINGS and National Beverage.
Diversification Opportunities for FIRST SAVINGS and National Beverage
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FIRST and National is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SAVINGS FINL 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 FIRST SAVINGS 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 FIRST SAVINGS FINL 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 FIRST SAVINGS i.e., FIRST SAVINGS and National Beverage go up and down completely randomly.
Pair Corralation between FIRST SAVINGS and National Beverage
Assuming the 90 days horizon FIRST SAVINGS FINL is expected to under-perform the National Beverage. In addition to that, FIRST SAVINGS is 2.2 times more volatile than National Beverage Corp. It trades about -0.18 of its total potential returns per unit of risk. National Beverage Corp is currently generating about -0.35 per unit of volatility. If you would invest 4,480 in National Beverage Corp on October 12, 2024 and sell it today you would lose (360.00) from holding National Beverage Corp or give up 8.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SAVINGS FINL vs. National Beverage Corp
Performance |
| Timeline |
| FIRST SAVINGS FINL |
| National Beverage Corp |
FIRST SAVINGS and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SAVINGS and National Beverage
The main advantage of trading using opposite FIRST SAVINGS and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SAVINGS 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.| FIRST SAVINGS vs. CITY OFFICE REIT | FIRST SAVINGS vs. Aedas Homes SA | FIRST SAVINGS vs. Diamyd Medical AB | FIRST SAVINGS vs. Neinor Homes SA |
| National Beverage vs. BURLINGTON STORES | National Beverage vs. Calibre Mining Corp | National Beverage vs. GREENX METALS LTD | National Beverage vs. ADRIATIC METALS LS 013355 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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