Correlation Between National Beverage and Imax Corp

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Can any of the company-specific risk be diversified away by investing in both National Beverage and Imax Corp 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 Imax Corp 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 Imax Corp, you can compare the effects of market volatilities on National Beverage and Imax Corp 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 Imax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Imax Corp.

Diversification Opportunities for National Beverage and Imax Corp

NationalImaxDiversified AwayNationalImaxDiversified Away100%
0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between National and Imax is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Imax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imax Corp 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 Imax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imax Corp has no effect on the direction of National Beverage i.e., National Beverage and Imax Corp go up and down completely randomly.

Pair Corralation between National Beverage and Imax Corp

Given the investment horizon of 90 days National Beverage Corp is expected to under-perform the Imax Corp. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 1.21 times less risky than Imax Corp. The stock trades about -0.14 of its potential returns per unit of risk. The Imax Corp is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  2,355  in Imax Corp on November 25, 2024 and sell it today you would earn a total of  248.00  from holding Imax Corp or generate 10.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

National Beverage Corp  vs.  Imax Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50510
JavaScript chart by amCharts 3.21.15FIZZ IMAX
       Timeline  
National Beverage Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days National Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb404244464850
Imax Corp 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Imax Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Imax Corp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2324252627

National Beverage and Imax Corp Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.69-2.05-1.4-0.75-0.10.471.051.632.212.79 0.060.080.100.120.140.16
JavaScript chart by amCharts 3.21.15FIZZ IMAX
       Returns  

Pair Trading with National Beverage and Imax Corp

The main advantage of trading using opposite National Beverage and Imax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Imax Corp 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 Imax Corp will offset losses from the drop in Imax Corp's long position.
The idea behind National Beverage Corp and Imax Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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