Correlation Between National Presto and Byrna Technologies
Can any of the company-specific risk be diversified away by investing in both National Presto and Byrna Technologies 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 Presto and Byrna Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Presto Industries and Byrna Technologies, you can compare the effects of market volatilities on National Presto and Byrna Technologies 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 Presto with a short position of Byrna Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Presto and Byrna Technologies.
Diversification Opportunities for National Presto and Byrna Technologies
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and Byrna is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding National Presto Industries and Byrna Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byrna Technologies and National Presto 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 Presto Industries are associated (or correlated) with Byrna Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byrna Technologies has no effect on the direction of National Presto i.e., National Presto and Byrna Technologies go up and down completely randomly.
Pair Corralation between National Presto and Byrna Technologies
Considering the 90-day investment horizon National Presto is expected to generate 16.05 times less return on investment than Byrna Technologies. But when comparing it to its historical volatility, National Presto Industries is 4.78 times less risky than Byrna Technologies. It trades about 0.05 of its potential returns per unit of risk. Byrna Technologies is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,075 in Byrna Technologies on September 2, 2024 and sell it today you would earn a total of 858.00 from holding Byrna Technologies or generate 79.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Presto Industries vs. Byrna Technologies
Performance |
| Timeline |
| National Presto Indu |
| Byrna Technologies |
National Presto and Byrna Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Presto and Byrna Technologies
The main advantage of trading using opposite National Presto and Byrna Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Presto position performs unexpectedly, Byrna Technologies 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 Byrna Technologies will offset losses from the drop in Byrna Technologies' long position.| National Presto vs. Park Electrochemical | National Presto vs. Ducommun Incorporated | National Presto vs. Innovative Solutions and | National Presto vs. VSE Corporation |
| Byrna Technologies vs. Heico | Byrna Technologies vs. Mercury Systems | Byrna Technologies vs. AeroVironment | Byrna Technologies vs. Howmet Aerospace |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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