Correlation Between National Beverage and Raymond James

Can any of the company-specific risk be diversified away by investing in both National Beverage and Raymond James 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 Beverage and Raymond James into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between National Beverage Corp and Raymond James Financial, you can compare the effects of market volatilities on National Beverage and Raymond James 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 Beverage with a short position of Raymond James. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Raymond James.

Diversification Opportunities for National Beverage and Raymond James

0.48

Correlation Coefficient

National Beverage  Raymond James

Very weak diversification

The 3 months correlation between National and Raymond is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Raymond James Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raymond James Financial and National Beverage 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 Beverage Corp are associated (or correlated) with Raymond James. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raymond James Financial has no effect on the direction of National Beverage i.e., National Beverage and Raymond James go up and down completely randomly.

Pair Corralation between National Beverage and Raymond James

Assuming the 90 days trading horizon National Beverage is expected to generate 1.39 times less return on investment than Raymond James. In addition to that, National Beverage is 2.06 times more volatile than Raymond James Financial. It trades about 0.02 of its total potential returns per unit of risk. Raymond James Financial is currently generating about 0.05 per unit of volatility. If you would invest  11,086  in Raymond James Financial on October 11, 2024 and sell it today you would earn a total of  4,801  from holding Raymond James Financial or generate 43.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.76%
Values	Daily Returns

National Beverage Corp  vs.  Raymond James Financial

National Beverage Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, National Beverage is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Raymond James Financial

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Raymond James Financial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Raymond James unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Beverage and Raymond James

The main advantage of trading using opposite National Beverage and Raymond James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Raymond James 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 Raymond James will offset losses from the drop in Raymond James' long position.

The idea behind National Beverage Corp and Raymond James Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.