Correlation Between National Beverage and Sixt SE

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

Diversification Opportunities for National Beverage and Sixt SE

-0.8

Correlation Coefficient

National Beverage  Sixt SE

Pay attention - limited upside

The 3 months correlation between National and Sixt is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Sixt SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt SE 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 Sixt SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt SE has no effect on the direction of National Beverage i.e., National Beverage and Sixt SE go up and down completely randomly.

Pair Corralation between National Beverage and Sixt SE

Assuming the 90 days horizon National Beverage Corp is expected to under-perform the Sixt SE. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 1.11 times less risky than Sixt SE. The stock trades about -0.22 of its potential returns per unit of risk. The Sixt SE is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  7,155  in Sixt SE on December 5, 2024 and sell it today you would earn a total of  1,420  from holding Sixt SE or generate 19.85% return on investment over 90 days.

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

National Beverage Corp  vs.  Sixt SE

National Beverage Corp

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sixt SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sixt SE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sixt SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Beverage and Sixt SE

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

The idea behind National Beverage Corp and Sixt SE 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.