Correlation Between CIMG and National Beverage
Can any of the company-specific risk be diversified away by investing in both CIMG 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 CIMG and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIMG Inc and National Beverage Corp, you can compare the effects of market volatilities on CIMG 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 CIMG with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIMG and National Beverage.
Diversification Opportunities for CIMG and National Beverage
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CIMG and National is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CIMG Inc 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 CIMG 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 CIMG Inc 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 CIMG i.e., CIMG and National Beverage go up and down completely randomly.
Pair Corralation between CIMG and National Beverage
Considering the 90-day investment horizon CIMG Inc is expected to under-perform the National Beverage. In addition to that, CIMG is 3.1 times more volatile than National Beverage Corp. It trades about -0.14 of its total potential returns per unit of risk. National Beverage Corp is currently generating about -0.04 per unit of volatility. If you would invest 4,249 in National Beverage Corp on November 29, 2024 and sell it today you would lose (57.00) from holding National Beverage Corp or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIMG Inc vs. National Beverage Corp
Performance |
| Timeline |
| CIMG Inc |
| National Beverage Corp |
CIMG and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIMG and National Beverage
The main advantage of trading using opposite CIMG and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIMG 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.| CIMG vs. Borealis Foods | CIMG vs. Wing Yip Food | CIMG vs. Smithfield Foods, Common | CIMG vs. Above Food Ingredients |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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