Correlation Between National Beverage and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both National Beverage and AMCON Distributing 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 AMCON Distributing 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 AMCON Distributing, you can compare the effects of market volatilities on National Beverage and AMCON Distributing 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 AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and AMCON Distributing.
Diversification Opportunities for National Beverage and AMCON Distributing
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and AMCON is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing 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 AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of National Beverage i.e., National Beverage and AMCON Distributing go up and down completely randomly.
Pair Corralation between National Beverage and AMCON Distributing
Given the investment horizon of 90 days National Beverage Corp is expected to generate 0.55 times more return on investment than AMCON Distributing. However, National Beverage Corp is 1.83 times less risky than AMCON Distributing. It trades about 0.02 of its potential returns per unit of risk. AMCON Distributing is currently generating about 0.0 per unit of risk. If you would invest 4,542 in National Beverage Corp on September 4, 2024 and sell it today you would earn a total of 449.00 from holding National Beverage Corp or generate 9.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.99% |
Values | Daily Returns |
National Beverage Corp vs. AMCON Distributing
Performance |
Timeline |
National Beverage Corp |
AMCON Distributing |
National Beverage and AMCON Distributing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with National Beverage and AMCON Distributing
The main advantage of trading using opposite National Beverage and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, AMCON Distributing 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 AMCON Distributing will offset losses from the drop in AMCON Distributing'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 |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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