Correlation Between National Beverage and ALIOR BANK

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

Diversification Opportunities for National Beverage and ALIOR BANK

-0.08

Correlation Coefficient

National Beverage  ALIOR BANK

Good diversification

The 3 months correlation between National and ALIOR is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and ALIOR BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALIOR BANK 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 ALIOR BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALIOR BANK has no effect on the direction of National Beverage i.e., National Beverage and ALIOR BANK go up and down completely randomly.

Pair Corralation between National Beverage and ALIOR BANK

Assuming the 90 days horizon National Beverage Corp is expected to under-perform the ALIOR BANK. In addition to that, National Beverage is 1.19 times more volatile than ALIOR BANK. It trades about -0.22 of its total potential returns per unit of risk. ALIOR BANK is currently generating about -0.17 per unit of volatility. If you would invest  2,112  in ALIOR BANK on September 27, 2024 and sell it today you would lose (103.00) from holding ALIOR BANK or give up 4.88% of portfolio value over 90 days.

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

National Beverage Corp  vs.  ALIOR BANK

National Beverage Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in National Beverage Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, National Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ALIOR BANK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALIOR BANK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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 ALIOR BANK

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

The idea behind National Beverage Corp and ALIOR BANK 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.