Correlation Between National Beverage and Logan Ridge
Can any of the company-specific risk be diversified away by investing in both National Beverage and Logan Ridge 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 Logan Ridge 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 Logan Ridge Finance, you can compare the effects of market volatilities on National Beverage and Logan Ridge 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 Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Logan Ridge.
Diversification Opportunities for National Beverage and Logan Ridge
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Logan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Logan Ridge Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logan Ridge Finance 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 Logan Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logan Ridge Finance has no effect on the direction of National Beverage i.e., National Beverage and Logan Ridge go up and down completely randomly.
Pair Corralation between National Beverage and Logan Ridge
Given the investment horizon of 90 days National Beverage is expected to generate 3.74 times less return on investment than Logan Ridge. In addition to that, National Beverage is 1.54 times more volatile than Logan Ridge Finance. It trades about 0.01 of its total potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.05 per unit of volatility. If you would invest 2,003 in Logan Ridge Finance on September 2, 2024 and sell it today you would earn a total of 597.00 from holding Logan Ridge Finance or generate 29.81% 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. Logan Ridge Finance
Performance |
| Timeline |
| National Beverage Corp |
| Logan Ridge Finance |
National Beverage and Logan Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Logan Ridge
The main advantage of trading using opposite National Beverage and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Logan Ridge 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 Logan Ridge will offset losses from the drop in Logan Ridge'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 |
| Logan Ridge vs. Badger Infrastructure Solutions | Logan Ridge vs. Portman Ridge Finance | Logan Ridge vs. Inotiv Inc | Logan Ridge vs. Phenixfin |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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