Correlation Between National Beverage and AEGEAN AIRLINES

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

Diversification Opportunities for National Beverage and AEGEAN AIRLINES

-0.79

Correlation Coefficient

National Beverage  AEGEAN AIRLINES

Pay attention - limited upside

The 3 months correlation between National and AEGEAN is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES 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 AEGEAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEGEAN AIRLINES has no effect on the direction of National Beverage i.e., National Beverage and AEGEAN AIRLINES go up and down completely randomly.

Pair Corralation between National Beverage and AEGEAN AIRLINES

Assuming the 90 days horizon National Beverage Corp is expected to generate 1.27 times more return on investment than AEGEAN AIRLINES. However, National Beverage is 1.27 times more volatile than AEGEAN AIRLINES. It trades about 0.03 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about -0.02 per unit of risk. If you would invest  4,042  in National Beverage Corp on September 14, 2024 and sell it today you would earn a total of  438.00  from holding National Beverage Corp or generate 10.84% 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.  AEGEAN AIRLINES

National Beverage Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National Beverage Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, National Beverage may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AEGEAN AIRLINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEGEAN AIRLINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic 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 AEGEAN AIRLINES

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

The idea behind National Beverage Corp and AEGEAN AIRLINES 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.