Correlation Between National Beverage and 3I Group

Can any of the company-specific risk be diversified away by investing in both National Beverage and 3I Group 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 3I Group 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 3I Group PLC, you can compare the effects of market volatilities on National Beverage and 3I Group 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 3I Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and 3I Group.

Diversification Opportunities for National Beverage and 3I Group

-0.77

Correlation Coefficient

National Beverage  3I Group

Pay attention - limited upside

The 3 months correlation between National and III is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and 3I Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3I Group PLC 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 3I Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3I Group PLC has no effect on the direction of National Beverage i.e., National Beverage and 3I Group go up and down completely randomly.

Pair Corralation between National Beverage and 3I Group

Assuming the 90 days trading horizon National Beverage Corp is expected to under-perform the 3I Group. In addition to that, National Beverage is 1.22 times more volatile than 3I Group PLC. It trades about -0.13 of its total potential returns per unit of risk. 3I Group PLC is currently generating about 0.06 per unit of volatility. If you would invest  355,600  in 3I Group PLC on December 22, 2024 and sell it today you would earn a total of  15,700  from holding 3I Group PLC or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

National Beverage Corp  vs.  3I Group PLC

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 unsteady 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.

3I Group PLC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 3I Group PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, 3I Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with National Beverage and 3I Group

The main advantage of trading using opposite National Beverage and 3I Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, 3I Group 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 3I Group will offset losses from the drop in 3I Group's long position.

The idea behind National Beverage Corp and 3I Group PLC 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.