Correlation Between National Beverage and International Media
Can any of the company-specific risk be diversified away by investing in both National Beverage and International Media 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 International Media 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 International Media Acquisition, you can compare the effects of market volatilities on National Beverage and International Media 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 International Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and International Media.
Diversification Opportunities for National Beverage and International Media
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and International is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and International Media Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Media 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 International Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Media has no effect on the direction of National Beverage i.e., National Beverage and International Media go up and down completely randomly.
Pair Corralation between National Beverage and International Media
Given the investment horizon of 90 days National Beverage Corp is expected to generate 0.76 times more return on investment than International Media. However, National Beverage Corp is 1.32 times less risky than International Media. It trades about 0.06 of its potential returns per unit of risk. International Media Acquisition is currently generating about 0.01 per unit of risk. If you would invest 4,394 in National Beverage Corp on September 3, 2024 and sell it today you would earn a total of 545.00 from holding National Beverage Corp or generate 12.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.4% |
| Values | Daily Returns |
National Beverage Corp vs. International Media Acquisitio
Performance |
| Timeline |
| National Beverage Corp |
| International Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
National Beverage and International Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and International Media
The main advantage of trading using opposite National Beverage and International Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, International Media 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 International Media will offset losses from the drop in International Media'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 |
| International Media vs. Senmiao Technology | International Media vs. FARO Technologies | International Media vs. Dalata Hotel Group | International Media vs. NETGEAR |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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