Correlation Between Safety Shot and National Beverage
Can any of the company-specific risk be diversified away by investing in both Safety Shot 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 Safety Shot and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Shot and National Beverage Corp, you can compare the effects of market volatilities on Safety Shot 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 Safety Shot with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Shot and National Beverage.
Diversification Opportunities for Safety Shot and National Beverage
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Safety and National is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Safety Shot 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 Safety Shot 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 Safety Shot 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 Safety Shot i.e., Safety Shot and National Beverage go up and down completely randomly.
Pair Corralation between Safety Shot and National Beverage
Given the investment horizon of 90 days Safety Shot is expected to under-perform the National Beverage. In addition to that, Safety Shot is 2.78 times more volatile than National Beverage Corp. It trades about -0.26 of its total potential returns per unit of risk. National Beverage Corp is currently generating about 0.26 per unit of volatility. If you would invest 4,568 in National Beverage Corp on August 28, 2024 and sell it today you would earn a total of 394.00 from holding National Beverage Corp or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Shot vs. National Beverage Corp
Performance |
| Timeline |
| Safety Shot |
| National Beverage Corp |
Safety Shot and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Shot and National Beverage
The main advantage of trading using opposite Safety Shot and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Shot 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.| Safety Shot vs. Honest Company | Safety Shot vs. Hims Hers Health | Safety Shot vs. Procter Gamble | Safety Shot vs. Kimberly Clark |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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