Correlation Between National Beverage and Marti Technologies
Can any of the company-specific risk be diversified away by investing in both National Beverage and Marti Technologies 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 Marti Technologies 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 Marti Technologies, you can compare the effects of market volatilities on National Beverage and Marti Technologies 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 Marti Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Marti Technologies.
Diversification Opportunities for National Beverage and Marti Technologies
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and Marti is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Marti Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marti Technologies 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 Marti Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marti Technologies has no effect on the direction of National Beverage i.e., National Beverage and Marti Technologies go up and down completely randomly.
Pair Corralation between National Beverage and Marti Technologies
Given the investment horizon of 90 days National Beverage is expected to generate 6.08 times less return on investment than Marti Technologies. But when comparing it to its historical volatility, National Beverage Corp is 3.31 times less risky than Marti Technologies. It trades about 0.06 of its potential returns per unit of risk. Marti Technologies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 166.00 in Marti Technologies on September 3, 2024 and sell it today you would earn a total of 176.00 from holding Marti Technologies or generate 106.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Marti Technologies
Performance |
| Timeline |
| National Beverage Corp |
| Marti Technologies |
National Beverage and Marti Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Marti Technologies
The main advantage of trading using opposite National Beverage and Marti Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Marti Technologies 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 Marti Technologies will offset losses from the drop in Marti Technologies' 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 |
| Marti Technologies vs. Western Digital | Marti Technologies vs. Playtech plc | Marti Technologies vs. Analog Devices | Marti Technologies vs. National CineMedia |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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