Correlation Between National Beverage and Digital Ally
Can any of the company-specific risk be diversified away by investing in both National Beverage and Digital Ally 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 Digital Ally 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 Digital Ally, you can compare the effects of market volatilities on National Beverage and Digital Ally 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 Digital Ally. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Digital Ally.
Diversification Opportunities for National Beverage and Digital Ally
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Digital is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Digital Ally in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Ally 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 Digital Ally. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Ally has no effect on the direction of National Beverage i.e., National Beverage and Digital Ally go up and down completely randomly.
Pair Corralation between National Beverage and Digital Ally
Given the investment horizon of 90 days National Beverage Corp is expected to generate 0.1 times more return on investment than Digital Ally. However, National Beverage Corp is 9.54 times less risky than Digital Ally. It trades about 0.17 of its potential returns per unit of risk. Digital Ally is currently generating about -0.03 per unit of risk. If you would invest 4,568 in National Beverage Corp on August 27, 2024 and sell it today you would earn a total of 219.00 from holding National Beverage Corp or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Digital Ally
Performance |
| Timeline |
| National Beverage Corp |
| Digital Ally |
National Beverage and Digital Ally Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Digital Ally
The main advantage of trading using opposite National Beverage and Digital Ally positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Digital Ally 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 Digital Ally will offset losses from the drop in Digital Ally'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 |
| Digital Ally vs. Zedge Inc | Digital Ally vs. 36Kr Holdings | Digital Ally vs. MediaAlpha | Digital Ally vs. Vivid Seats |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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