Correlation Between National Beverage and Lifevantage
Can any of the company-specific risk be diversified away by investing in both National Beverage and Lifevantage 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 Lifevantage 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 Lifevantage, you can compare the effects of market volatilities on National Beverage and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Lifevantage.
Diversification Opportunities for National Beverage and Lifevantage
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Lifevantage is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of National Beverage i.e., National Beverage and Lifevantage go up and down completely randomly.
Pair Corralation between National Beverage and Lifevantage
Given the investment horizon of 90 days National Beverage Corp is expected to generate 0.4 times more return on investment than Lifevantage. However, National Beverage Corp is 2.48 times less risky than Lifevantage. It trades about 0.26 of its potential returns per unit of risk. Lifevantage is currently generating about 0.05 per unit of risk. If you would invest 4,568 in National Beverage Corp on August 28, 2024 and sell it today you would earn a total of 394.00 from holding National Beverage Corp or generate 8.63% 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. Lifevantage
Performance |
| Timeline |
| National Beverage Corp |
| Lifevantage |
National Beverage and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Lifevantage
The main advantage of trading using opposite National Beverage and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage'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 |
| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |