Correlation Between National Beverage and Grand Vision

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

Diversification Opportunities for National Beverage and Grand Vision

-0.44

Correlation Coefficient

National Beverage  Grand Vision

Very good diversification

The 3 months correlation between National and Grand is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Grand Vision Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Vision Media 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 Grand Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Vision Media has no effect on the direction of National Beverage i.e., National Beverage and Grand Vision go up and down completely randomly.

Pair Corralation between National Beverage and Grand Vision

Assuming the 90 days trading horizon National Beverage Corp is expected to generate 0.47 times more return on investment than Grand Vision. However, National Beverage Corp is 2.15 times less risky than Grand Vision. It trades about 0.08 of its potential returns per unit of risk. Grand Vision Media is currently generating about -0.12 per unit of risk. If you would invest  4,405  in National Beverage Corp on September 12, 2024 and sell it today you would earn a total of  315.00  from holding National Beverage Corp or generate 7.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

National Beverage Corp  vs.  Grand Vision Media

National Beverage Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in National Beverage Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, National Beverage may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Grand Vision Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Vision Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with National Beverage and Grand Vision

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

The idea behind National Beverage Corp and Grand Vision Media 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.