Correlation Between National Beverage and Catalyst Media

Can any of the company-specific risk be diversified away by investing in both National Beverage and Catalyst Media 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 Catalyst Media 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 Catalyst Media Group, you can compare the effects of market volatilities on National Beverage and Catalyst Media 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 Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Catalyst Media.

Diversification Opportunities for National Beverage and Catalyst Media

0.91

Correlation Coefficient

National Beverage  Catalyst Media

Almost no diversification

The 3 months correlation between National and Catalyst is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group 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 Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of National Beverage i.e., National Beverage and Catalyst Media go up and down completely randomly.

Pair Corralation between National Beverage and Catalyst Media

Assuming the 90 days trading horizon National Beverage Corp is expected to generate 0.64 times more return on investment than Catalyst Media. However, National Beverage Corp is 1.56 times less risky than Catalyst Media. It trades about -0.21 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.18 per unit of risk. If you would invest  4,954  in National Beverage Corp on December 2, 2024 and sell it today you would lose (993.00) from holding National Beverage Corp or give up 20.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

National Beverage Corp  vs.  Catalyst Media Group

National Beverage Corp

Risk-Adjusted Performance

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 conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Catalyst Media Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Catalyst Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with National Beverage and Catalyst Media

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

The idea behind National Beverage Corp and Catalyst Media Group 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.