Correlation Between National Beverage and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both National Beverage and Kraft Heinz 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 Kraft Heinz 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 Kraft Heinz Co, you can compare the effects of market volatilities on National Beverage and Kraft Heinz 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 Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Kraft Heinz.
Diversification Opportunities for National Beverage and Kraft Heinz
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Kraft is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz 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 Kraft Heinz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Heinz has no effect on the direction of National Beverage i.e., National Beverage and Kraft Heinz go up and down completely randomly.
Pair Corralation between National Beverage and Kraft Heinz
Given the investment horizon of 90 days National Beverage Corp is expected to generate 1.4 times more return on investment than Kraft Heinz. However, National Beverage is 1.4 times more volatile than Kraft Heinz Co. It trades about 0.24 of its potential returns per unit of risk. Kraft Heinz Co is currently generating about -0.14 per unit of risk. If you would invest 4,577 in National Beverage Corp on September 2, 2024 and sell it today you would earn a total of 362.00 from holding National Beverage Corp or generate 7.91% 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. Kraft Heinz Co
Performance |
| Timeline |
| National Beverage Corp |
| Kraft Heinz |
National Beverage and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Kraft Heinz
The main advantage of trading using opposite National Beverage and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Kraft Heinz 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 Kraft Heinz will offset losses from the drop in Kraft Heinz'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 |
| Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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