Correlation Between ANT and National Beverage
Can any of the company-specific risk be diversified away by investing in both ANT 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 ANT and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and National Beverage Corp, you can compare the effects of market volatilities on ANT 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 ANT with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and National Beverage.
Diversification Opportunities for ANT and National Beverage
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between ANT and National is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding ANT 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 ANT 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 ANT 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 ANT i.e., ANT and National Beverage go up and down completely randomly.
Pair Corralation between ANT and National Beverage
Assuming the 90 days trading horizon ANT is expected to generate 16.38 times more return on investment than National Beverage. However, ANT is 16.38 times more volatile than National Beverage Corp. It trades about 0.09 of its potential returns per unit of risk. National Beverage Corp is currently generating about -0.3 per unit of risk. If you would invest 147.00 in ANT on October 20, 2024 and sell it today you would earn a total of 0.00 from holding ANT or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
ANT vs. National Beverage Corp
Performance |
| Timeline |
| ANT |
| National Beverage Corp |
ANT and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and National Beverage
The main advantage of trading using opposite ANT and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT 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.The idea behind ANT and National Beverage Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| National Beverage vs. Monster Beverage Corp | National Beverage vs. Celsius Holdings | National Beverage vs. Coca Cola Consolidated | National Beverage vs. PepsiCo |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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