Correlation Between National Beverage and KNOT Offshore
Can any of the company-specific risk be diversified away by investing in both National Beverage and KNOT Offshore 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 KNOT Offshore 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 KNOT Offshore Partners, you can compare the effects of market volatilities on National Beverage and KNOT Offshore 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 KNOT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and KNOT Offshore.
Diversification Opportunities for National Beverage and KNOT Offshore
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and KNOT is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and KNOT Offshore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KNOT Offshore Partners 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 KNOT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KNOT Offshore Partners has no effect on the direction of National Beverage i.e., National Beverage and KNOT Offshore go up and down completely randomly.
Pair Corralation between National Beverage and KNOT Offshore
Given the investment horizon of 90 days National Beverage Corp is expected to generate 0.7 times more return on investment than KNOT Offshore. However, National Beverage Corp is 1.43 times less risky than KNOT Offshore. It trades about 0.16 of its potential returns per unit of risk. KNOT Offshore Partners is currently generating about -0.05 per unit of risk. If you would invest 4,568 in National Beverage Corp on August 25, 2024 and sell it today you would earn a total of 219.00 from holding National Beverage Corp or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
National Beverage Corp vs. KNOT Offshore Partners
Performance |
| Timeline |
| National Beverage Corp |
| KNOT Offshore Partners |
National Beverage and KNOT Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and KNOT Offshore
The main advantage of trading using opposite National Beverage and KNOT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, KNOT Offshore 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 KNOT Offshore will offset losses from the drop in KNOT Offshore'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 |
| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore vs. Delek Logistics Partners |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |