Correlation Between National Beverage and Apogee Enterprises
Can any of the company-specific risk be diversified away by investing in both National Beverage and Apogee Enterprises 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 Apogee Enterprises 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 Apogee Enterprises, you can compare the effects of market volatilities on National Beverage and Apogee Enterprises 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 Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Apogee Enterprises.
Diversification Opportunities for National Beverage and Apogee Enterprises
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Apogee is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises 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 Apogee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apogee Enterprises has no effect on the direction of National Beverage i.e., National Beverage and Apogee Enterprises go up and down completely randomly.
Pair Corralation between National Beverage and Apogee Enterprises
Given the investment horizon of 90 days National Beverage is expected to generate 1.08 times less return on investment than Apogee Enterprises. But when comparing it to its historical volatility, National Beverage Corp is 1.25 times less risky than Apogee Enterprises. It trades about 0.28 of its potential returns per unit of risk. Apogee Enterprises is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 7,586 in Apogee Enterprises on August 31, 2024 and sell it today you would earn a total of 792.00 from holding Apogee Enterprises or generate 10.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Apogee Enterprises
Performance |
| Timeline |
| National Beverage Corp |
| Apogee Enterprises |
National Beverage and Apogee Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Apogee Enterprises
The main advantage of trading using opposite National Beverage and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Apogee Enterprises 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 Apogee Enterprises will offset losses from the drop in Apogee Enterprises' 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 |
| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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