Correlation Between National Beverage and HEXINDO ADIPERKASA
Can any of the company-specific risk be diversified away by investing in both National Beverage and HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA, you can compare the effects of market volatilities on National Beverage and HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and HEXINDO ADIPERKASA.
Diversification Opportunities for National Beverage and HEXINDO ADIPERKASA
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and HEXINDO is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and HEXINDO ADIPERKASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEXINDO ADIPERKASA has no effect on the direction of National Beverage i.e., National Beverage and HEXINDO ADIPERKASA go up and down completely randomly.
Pair Corralation between National Beverage and HEXINDO ADIPERKASA
Assuming the 90 days horizon National Beverage Corp is expected to generate 0.68 times more return on investment than HEXINDO ADIPERKASA. However, National Beverage Corp is 1.48 times less risky than HEXINDO ADIPERKASA. It trades about -0.08 of its potential returns per unit of risk. HEXINDO ADIPERKASA is currently generating about -0.14 per unit of risk. If you would invest 4,080 in National Beverage Corp on December 29, 2024 and sell it today you would lose (340.00) from holding National Beverage Corp or give up 8.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
National Beverage Corp vs. HEXINDO ADIPERKASA
Performance |
Timeline |
National Beverage Corp |
HEXINDO ADIPERKASA |
National Beverage and HEXINDO ADIPERKASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with National Beverage and HEXINDO ADIPERKASA
The main advantage of trading using opposite National Beverage and HEXINDO ADIPERKASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA will offset losses from the drop in HEXINDO ADIPERKASA's long position.National Beverage vs. Monster Beverage Corp | National Beverage vs. Keurig Dr Pepper | National Beverage vs. Coca Cola European Partners | National Beverage vs. Coca Cola FEMSA SAB |
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Check out your portfolio center.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 Transaction History module to view history of all your transactions and understand their impact on performance.
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