Correlation Between Global Partner and National Beverage
Can any of the company-specific risk be diversified away by investing in both Global Partner 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 Global Partner and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Partner Acq and National Beverage Corp, you can compare the effects of market volatilities on Global Partner 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 Global Partner with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Partner and National Beverage.
Diversification Opportunities for Global Partner and National Beverage
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and National is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Global Partner Acq 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 Global Partner 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 Global Partner Acq 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 Global Partner i.e., Global Partner and National Beverage go up and down completely randomly.
Pair Corralation between Global Partner and National Beverage
Assuming the 90 days horizon Global Partner Acq is expected to under-perform the National Beverage. But the stock apears to be less risky and, when comparing its historical volatility, Global Partner Acq is 1.75 times less risky than National Beverage. The stock trades about -0.05 of its potential returns per unit of risk. The National Beverage Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,478 in National Beverage Corp on September 14, 2024 and sell it today you would earn a total of 190.00 from holding National Beverage Corp or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.74% |
| Values | Daily Returns |
Global Partner Acq vs. National Beverage Corp
Performance |
| Timeline |
| Global Partner Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| National Beverage Corp |
Global Partner and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Partner and National Beverage
The main advantage of trading using opposite Global Partner and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Partner 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.| Global Partner vs. National Beverage Corp | Global Partner vs. IPG Photonics | Global Partner vs. Amkor Technology | Global Partner vs. Fomento Economico Mexicano |
| 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 |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |