Correlation Between National Beverage and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both National Beverage and Mativ Holdings 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 Mativ Holdings 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 Mativ Holdings, you can compare the effects of market volatilities on National Beverage and Mativ Holdings 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 Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Mativ Holdings.
Diversification Opportunities for National Beverage and Mativ Holdings
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Mativ is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ Holdings 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 Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of National Beverage i.e., National Beverage and Mativ Holdings go up and down completely randomly.
Pair Corralation between National Beverage and Mativ Holdings
Given the investment horizon of 90 days National Beverage Corp is expected to generate 0.76 times more return on investment than Mativ Holdings. However, National Beverage Corp is 1.31 times less risky than Mativ Holdings. It trades about -0.12 of its potential returns per unit of risk. Mativ Holdings is currently generating about -0.12 per unit of risk. If you would invest 5,003 in National Beverage Corp on September 13, 2024 and sell it today you would lose (304.50) from holding National Beverage Corp or give up 6.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Mativ Holdings
Performance |
| Timeline |
| National Beverage Corp |
| Mativ Holdings |
National Beverage and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Mativ Holdings
The main advantage of trading using opposite National Beverage and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Mativ Holdings 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 Mativ Holdings will offset losses from the drop in Mativ Holdings' long position.| National Beverage vs. Coca Cola Femsa SAB | National Beverage vs. Keurig Dr Pepper | National Beverage vs. Embotelladora Andina SA | National Beverage vs. Coca Cola European Partners |
| Mativ Holdings vs. Orion Engineered Carbons | Mativ Holdings vs. Select Energy Services | Mativ Holdings vs. Perimeter Solutions SA | Mativ Holdings vs. FutureFuel Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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