Correlation Between National Beverage and Liontrust Asset

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

Diversification Opportunities for National Beverage and Liontrust Asset

0.03

Correlation Coefficient

National Beverage  Liontrust Asset

Significant diversification

The 3 months correlation between National and Liontrust is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana 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 Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of National Beverage i.e., National Beverage and Liontrust Asset go up and down completely randomly.

Pair Corralation between National Beverage and Liontrust Asset

Assuming the 90 days trading horizon National Beverage Corp is expected to under-perform the Liontrust Asset. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 1.58 times less risky than Liontrust Asset. The stock trades about -0.2 of its potential returns per unit of risk. The Liontrust Asset Management is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  39,675  in Liontrust Asset Management on November 20, 2024 and sell it today you would earn a total of  5,525  from holding Liontrust Asset Management or generate 13.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

National Beverage Corp  vs.  Liontrust Asset Management

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 March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Liontrust Asset Mana

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Liontrust Asset Management are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Liontrust Asset exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Beverage and Liontrust Asset

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

The idea behind National Beverage Corp and Liontrust Asset Management 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.