Correlation Between National Beverage and MIRAMAR HOTEL

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

Diversification Opportunities for National Beverage and MIRAMAR HOTEL

0.25

Correlation Coefficient

National Beverage  MIRAMAR HOTEL

Modest diversification

The 3 months correlation between National and MIRAMAR is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV 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 MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of National Beverage i.e., National Beverage and MIRAMAR HOTEL go up and down completely randomly.

Pair Corralation between National Beverage and MIRAMAR HOTEL

Assuming the 90 days horizon National Beverage is expected to generate 3.99 times less return on investment than MIRAMAR HOTEL. But when comparing it to its historical volatility, National Beverage Corp is 2.06 times less risky than MIRAMAR HOTEL. It trades about 0.07 of its potential returns per unit of risk. MIRAMAR HOTEL INV is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  88.00  in MIRAMAR HOTEL INV on September 21, 2024 and sell it today you would earn a total of  25.00  from holding MIRAMAR HOTEL INV or generate 28.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

National Beverage Corp  vs.  MIRAMAR HOTEL INV

National Beverage Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in National Beverage Corp are ranked lower than 5 (%) 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.

MIRAMAR HOTEL INV

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MIRAMAR HOTEL INV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, MIRAMAR HOTEL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Beverage and MIRAMAR HOTEL

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

The idea behind National Beverage Corp and MIRAMAR HOTEL INV 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.