Correlation Between Bloomsbury Publishing and National Beverage
Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing 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 Bloomsbury Publishing and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomsbury Publishing Plc and National Beverage Corp, you can compare the effects of market volatilities on Bloomsbury Publishing 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 Bloomsbury Publishing with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and National Beverage.
Diversification Opportunities for Bloomsbury Publishing and National Beverage
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bloomsbury and National is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc 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 Bloomsbury Publishing 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 Bloomsbury Publishing Plc 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 Bloomsbury Publishing i.e., Bloomsbury Publishing and National Beverage go up and down completely randomly.
Pair Corralation between Bloomsbury Publishing and National Beverage
Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to generate 1.02 times more return on investment than National Beverage. However, Bloomsbury Publishing is 1.02 times more volatile than National Beverage Corp. It trades about -0.04 of its potential returns per unit of risk. National Beverage Corp is currently generating about -0.14 per unit of risk. If you would invest 69,000 in Bloomsbury Publishing Plc on November 8, 2024 and sell it today you would lose (3,400) from holding Bloomsbury Publishing Plc or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Bloomsbury Publishing Plc vs. National Beverage Corp
Performance |
| Timeline |
| Bloomsbury Publishing Plc |
| National Beverage Corp |
Bloomsbury Publishing and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomsbury Publishing and National Beverage
The main advantage of trading using opposite Bloomsbury Publishing and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomsbury Publishing 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.| Bloomsbury Publishing vs. Melia Hotels | Bloomsbury Publishing vs. Scandic Hotels Group | Bloomsbury Publishing vs. Applied Materials | Bloomsbury Publishing vs. PPHE Hotel Group |
| National Beverage vs. Aeorema Communications Plc | National Beverage vs. Spirent Communications plc | National Beverage vs. MTI Wireless Edge | National Beverage vs. United Internet AG |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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