Correlation Between National Beverage and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both National Beverage and Maiden 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 Maiden 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 Maiden Holdings, you can compare the effects of market volatilities on National Beverage and Maiden 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 Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Maiden Holdings.
Diversification Opportunities for National Beverage and Maiden Holdings
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Maiden is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden 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 Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of National Beverage i.e., National Beverage and Maiden Holdings go up and down completely randomly.
Pair Corralation between National Beverage and Maiden Holdings
Given the investment horizon of 90 days National Beverage Corp is expected to generate 1.18 times more return on investment than Maiden Holdings. However, National Beverage is 1.18 times more volatile than Maiden Holdings. It trades about 0.26 of its potential returns per unit of risk. Maiden Holdings is currently generating about -0.04 per unit of risk. If you would invest 4,568 in National Beverage Corp on August 27, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Maiden Holdings
Performance |
| Timeline |
| National Beverage Corp |
| Maiden Holdings |
National Beverage and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Maiden Holdings
The main advantage of trading using opposite National Beverage and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Maiden 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 Maiden Holdings will offset losses from the drop in Maiden Holdings' 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 |
| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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