Correlation Between National Beverage and YanGuFang International
Can any of the company-specific risk be diversified away by investing in both National Beverage and YanGuFang International 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 YanGuFang International 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 YanGuFang International Group, you can compare the effects of market volatilities on National Beverage and YanGuFang International 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 YanGuFang International. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and YanGuFang International.
Diversification Opportunities for National Beverage and YanGuFang International
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and YanGuFang is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and YanGuFang International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YanGuFang International 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 YanGuFang International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YanGuFang International has no effect on the direction of National Beverage i.e., National Beverage and YanGuFang International go up and down completely randomly.
Pair Corralation between National Beverage and YanGuFang International
Given the investment horizon of 90 days National Beverage Corp is expected to generate 0.17 times more return on investment than YanGuFang International. However, National Beverage Corp is 5.76 times less risky than YanGuFang International. It trades about 0.01 of its potential returns per unit of risk. YanGuFang International Group is currently generating about -0.14 per unit of risk. If you would invest 4,803 in National Beverage Corp on September 12, 2024 and sell it today you would lose (46.00) from holding National Beverage Corp or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 60.51% |
| Values | Daily Returns |
National Beverage Corp vs. YanGuFang International Group
Performance |
| Timeline |
| National Beverage Corp |
| YanGuFang International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
National Beverage and YanGuFang International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and YanGuFang International
The main advantage of trading using opposite National Beverage and YanGuFang International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, YanGuFang International 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 YanGuFang International will offset losses from the drop in YanGuFang International'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 |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |