Correlation Between National Beverage and Expeditors International

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

Diversification Opportunities for National Beverage and Expeditors International

0.82

Correlation Coefficient

National Beverage  Expeditors International

Very poor diversification

The 3 months correlation between National and Expeditors is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Expeditors International of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expeditors International 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 Expeditors International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expeditors International has no effect on the direction of National Beverage i.e., National Beverage and Expeditors International go up and down completely randomly.

Pair Corralation between National Beverage and Expeditors International

Assuming the 90 days horizon National Beverage Corp is expected to under-perform the Expeditors International. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 1.05 times less risky than Expeditors International. The stock trades about -0.1 of its potential returns per unit of risk. The Expeditors International of is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  10,615  in Expeditors International of on October 25, 2024 and sell it today you would earn a total of  155.00  from holding Expeditors International of or generate 1.46% return on investment over 90 days.

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

National Beverage Corp  vs.  Expeditors International of

National Beverage Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, National Beverage is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Expeditors International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expeditors International of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Expeditors International is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with National Beverage and Expeditors International

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

The idea behind National Beverage Corp and Expeditors International of 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.