Correlation Between National Beverage and GE Vernova
Can any of the company-specific risk be diversified away by investing in both National Beverage and GE Vernova 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 GE Vernova 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 GE Vernova LLC, you can compare the effects of market volatilities on National Beverage and GE Vernova 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 GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and GE Vernova.
Diversification Opportunities for National Beverage and GE Vernova
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and GEV is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and GE Vernova LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Vernova LLC 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 GE Vernova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Vernova LLC has no effect on the direction of National Beverage i.e., National Beverage and GE Vernova go up and down completely randomly.
Pair Corralation between National Beverage and GE Vernova
Given the investment horizon of 90 days National Beverage is expected to generate 1.37 times less return on investment than GE Vernova. But when comparing it to its historical volatility, National Beverage Corp is 2.18 times less risky than GE Vernova. It trades about 0.27 of its potential returns per unit of risk. GE Vernova LLC is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 29,877 in GE Vernova LLC on August 30, 2024 and sell it today you would earn a total of 3,656 from holding GE Vernova LLC or generate 12.24% 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. GE Vernova LLC
Performance |
| Timeline |
| National Beverage Corp |
| GE Vernova LLC |
National Beverage and GE Vernova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and GE Vernova
The main advantage of trading using opposite National Beverage and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, GE Vernova 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 GE Vernova will offset losses from the drop in GE Vernova'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 |
| GE Vernova vs. Sweetgreen | GE Vernova vs. Artisan Partners Asset | GE Vernova vs. Dalata Hotel Group | GE Vernova vs. Papaya Growth Opportunity |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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