Correlation Between National Beverage and Griffin Mining

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

Diversification Opportunities for National Beverage and Griffin Mining

-0.3

Correlation Coefficient

National Beverage  Griffin Mining

Very good diversification

The 3 months correlation between National and Griffin is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining 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 Griffin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffin Mining has no effect on the direction of National Beverage i.e., National Beverage and Griffin Mining go up and down completely randomly.

Pair Corralation between National Beverage and Griffin Mining

Assuming the 90 days trading horizon National Beverage Corp is expected to under-perform the Griffin Mining. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 1.52 times less risky than Griffin Mining. The stock trades about -0.1 of its potential returns per unit of risk. The Griffin Mining is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  15,000  in Griffin Mining on October 4, 2024 and sell it today you would lose (400.00) from holding Griffin Mining or give up 2.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

National Beverage Corp  vs.  Griffin Mining

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.

Griffin Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Griffin Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with National Beverage and Griffin Mining

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

The idea behind National Beverage Corp and Griffin Mining 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.