Correlation Between National Beverage and Swiss Water
Can any of the company-specific risk be diversified away by investing in both National Beverage and Swiss Water 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 Swiss Water 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 Swiss Water Decaffeinated, you can compare the effects of market volatilities on National Beverage and Swiss Water 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 Swiss Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Swiss Water.
Diversification Opportunities for National Beverage and Swiss Water
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Swiss is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Swiss Water Decaffeinated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Water Decaffeinated 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 Swiss Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Water Decaffeinated has no effect on the direction of National Beverage i.e., National Beverage and Swiss Water go up and down completely randomly.
Pair Corralation between National Beverage and Swiss Water
Given the investment horizon of 90 days National Beverage Corp is expected to generate 18.97 times more return on investment than Swiss Water. However, National Beverage is 18.97 times more volatile than Swiss Water Decaffeinated. It trades about 0.27 of its potential returns per unit of risk. Swiss Water Decaffeinated is currently generating about -0.22 per unit of risk. If you would invest 4,519 in National Beverage Corp on September 1, 2024 and sell it today you would earn a total of 420.00 from holding National Beverage Corp or generate 9.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Swiss Water Decaffeinated
Performance |
| Timeline |
| National Beverage Corp |
| Swiss Water Decaffeinated |
National Beverage and Swiss Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Swiss Water
The main advantage of trading using opposite National Beverage and Swiss Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Swiss Water 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 Swiss Water will offset losses from the drop in Swiss Water'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 |
| Swiss Water vs. Signet International Holdings | Swiss Water vs. National Beverage Corp | Swiss Water vs. PT Astra International | Swiss Water vs. Vita Coco |
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 CEOs Directory module to screen CEOs from public companies around the world.
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