Correlation Between National Beverage and Thor Industries
Can any of the company-specific risk be diversified away by investing in both National Beverage and Thor Industries 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 Thor Industries 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 Thor Industries, you can compare the effects of market volatilities on National Beverage and Thor Industries 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 Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Thor Industries.
Diversification Opportunities for National Beverage and Thor Industries
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Thor is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries 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 Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of National Beverage i.e., National Beverage and Thor Industries go up and down completely randomly.
Pair Corralation between National Beverage and Thor Industries
Given the investment horizon of 90 days National Beverage Corp is expected to generate 1.28 times more return on investment than Thor Industries. However, National Beverage is 1.28 times more volatile than Thor Industries. It trades about -0.12 of its potential returns per unit of risk. Thor Industries is currently generating about -0.16 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 (304.00) from holding National Beverage Corp or give up 6.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Thor Industries
Performance |
| Timeline |
| National Beverage Corp |
| Thor Industries |
National Beverage and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Thor Industries
The main advantage of trading using opposite National Beverage and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Thor Industries 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 Thor Industries will offset losses from the drop in Thor Industries' 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 |
| Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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