Correlation Between Citizens Financial and National Beverage
Can any of the company-specific risk be diversified away by investing in both Citizens Financial 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 Citizens Financial and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens Financial Group, and National Beverage Corp, you can compare the effects of market volatilities on Citizens Financial 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 Citizens Financial with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and National Beverage.
Diversification Opportunities for Citizens Financial and National Beverage
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citizens and National is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group, 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 Citizens Financial 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 Citizens Financial Group, 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 Citizens Financial i.e., Citizens Financial and National Beverage go up and down completely randomly.
Pair Corralation between Citizens Financial and National Beverage
Assuming the 90 days trading horizon Citizens Financial is expected to generate 13.29 times less return on investment than National Beverage. But when comparing it to its historical volatility, Citizens Financial Group, is 3.07 times less risky than National Beverage. It trades about 0.06 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 4,519 in National Beverage Corp on September 1, 2024 and sell it today you would earn a total of 420.00 from holding National Beverage Corp or generate 9.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens Financial Group, vs. National Beverage Corp
Performance |
| Timeline |
| Citizens Financial Group, |
| National Beverage Corp |
Citizens Financial and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens Financial and National Beverage
The main advantage of trading using opposite Citizens Financial and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial 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.| Citizens Financial vs. National Beverage Corp | Citizens Financial vs. Upper Street Marketing | Citizens Financial vs. Molson Coors Brewing | Citizens Financial vs. Diageo PLC ADR |
| National Beverage vs. Celsius Holdings | National Beverage vs. Monster Beverage Corp | National Beverage vs. Coca Cola Femsa SAB | National Beverage vs. Keurig Dr Pepper |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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