Correlation Between National Beverage and Zinc Media

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

Diversification Opportunities for National Beverage and Zinc Media

-0.75

Correlation Coefficient

National Beverage  Zinc Media

Pay attention - limited upside

The 3 months correlation between National and Zinc is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Zinc Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinc 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 Zinc Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinc Media Group has no effect on the direction of National Beverage i.e., National Beverage and Zinc Media go up and down completely randomly.

Pair Corralation between National Beverage and Zinc Media

Assuming the 90 days trading horizon National Beverage Corp is expected to under-perform the Zinc Media. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 1.1 times less risky than Zinc Media. The stock trades about -0.2 of its potential returns per unit of risk. The Zinc Media Group is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  5,750  in Zinc Media Group on November 29, 2024 and sell it today you would earn a total of  750.00  from holding Zinc Media Group or generate 13.04% return on investment over 90 days.

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

National Beverage Corp  vs.  Zinc 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 uncertain 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.

Zinc Media Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zinc Media Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Zinc Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Beverage and Zinc Media

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

The idea behind National Beverage Corp and Zinc 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.