Correlation Between National Beverage and Air Lease
Can any of the company-specific risk be diversified away by investing in both National Beverage and Air Lease 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 National Beverage and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Beverage Corp and Air Lease, you can compare the effects of market volatilities on National Beverage and Air Lease 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 National Beverage with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Air Lease.
Diversification Opportunities for National Beverage and Air Lease
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between National and Air is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and National Beverage 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 National Beverage Corp are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of National Beverage i.e., National Beverage and Air Lease go up and down completely randomly.
Pair Corralation between National Beverage and Air Lease
Given the investment horizon of 90 days National Beverage is expected to generate 16.58 times less return on investment than Air Lease. In addition to that, National Beverage is 1.01 times more volatile than Air Lease. It trades about 0.0 of its total potential returns per unit of risk. Air Lease is currently generating about 0.05 per unit of volatility. If you would invest 3,922 in Air Lease on September 12, 2024 and sell it today you would earn a total of 1,089 from holding Air Lease or generate 27.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Air Lease
Performance |
| Timeline |
| National Beverage Corp |
| Air Lease |
National Beverage and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Air Lease
The main advantage of trading using opposite National Beverage and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| National Beverage vs. Celsius Holdings | National Beverage vs. Monster Beverage Corp | National Beverage vs. Coca Cola Femsa SAB | National Beverage vs. Keurig Dr Pepper |
| Air Lease vs. McGrath RentCorp | Air Lease vs. Alta Equipment Group | Air Lease vs. Custom Truck One | Air Lease vs. GATX Corporation |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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