Correlation Between GAMESTOP and National Beverage
Can any of the company-specific risk be diversified away by investing in both GAMESTOP 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 GAMESTOP and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMESTOP and National Beverage Corp, you can compare the effects of market volatilities on GAMESTOP 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 GAMESTOP with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMESTOP and National Beverage.
Diversification Opportunities for GAMESTOP and National Beverage
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GAMESTOP and National is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding GAMESTOP 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 GAMESTOP 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 GAMESTOP 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 GAMESTOP i.e., GAMESTOP and National Beverage go up and down completely randomly.
Pair Corralation between GAMESTOP and National Beverage
Assuming the 90 days trading horizon GAMESTOP is expected to generate 2.13 times more return on investment than National Beverage. However, GAMESTOP is 2.13 times more volatile than National Beverage Corp. It trades about 0.33 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.31 per unit of risk. If you would invest 2,055 in GAMESTOP on September 2, 2024 and sell it today you would earn a total of 647.00 from holding GAMESTOP or generate 31.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMESTOP vs. National Beverage Corp
Performance |
| Timeline |
| GAMESTOP |
| National Beverage Corp |
GAMESTOP and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMESTOP and National Beverage
The main advantage of trading using opposite GAMESTOP and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMESTOP 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.| GAMESTOP vs. SIVERS SEMICONDUCTORS AB | GAMESTOP vs. Darden Restaurants | GAMESTOP vs. Reliance Steel Aluminum | GAMESTOP vs. Q2M Managementberatung AG |
| National Beverage vs. PepsiCo | National Beverage vs. Superior Plus Corp | National Beverage vs. NMI Holdings | National Beverage vs. Origin Agritech |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges |