Correlation Between Great Elm and National Beverage
Can any of the company-specific risk be diversified away by investing in both Great Elm and National Beverage 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 Great Elm and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Elm Capital and National Beverage Corp, you can compare the effects of market volatilities on Great Elm and National Beverage 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 Great Elm with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Elm and National Beverage.
Diversification Opportunities for Great Elm and National Beverage
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Great and National is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Great Elm Capital and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp and Great Elm 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 Great Elm Capital are associated (or correlated) with National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Great Elm i.e., Great Elm and National Beverage go up and down completely randomly.
Pair Corralation between Great Elm and National Beverage
Assuming the 90 days horizon Great Elm Capital is expected to generate 0.14 times more return on investment than National Beverage. However, Great Elm Capital is 7.06 times less risky than National Beverage. It trades about 0.06 of its potential returns per unit of risk. National Beverage Corp is currently generating about -0.16 per unit of risk. If you would invest 2,518 in Great Elm Capital on October 25, 2024 and sell it today you would earn a total of 5.00 from holding Great Elm Capital or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Elm Capital vs. National Beverage Corp
Performance |
| Timeline |
| Great Elm Capital |
| National Beverage Corp |
Great Elm and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Elm and National Beverage
The main advantage of trading using opposite Great Elm and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Elm position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| Great Elm vs. National Beverage Corp | Great Elm vs. Nascent Wine | Great Elm vs. The Mosaic | Great Elm vs. Codexis |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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