Correlation Between National Beverage and ZURICH INSURANCE

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

Diversification Opportunities for National Beverage and ZURICH INSURANCE

0.7

Correlation Coefficient

National Beverage  ZURICH INSURANCE

Poor diversification

The 3 months correlation between National and ZURICH is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and ZURICH INSURANCE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZURICH INSURANCE 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 ZURICH INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZURICH INSURANCE has no effect on the direction of National Beverage i.e., National Beverage and ZURICH INSURANCE go up and down completely randomly.

Pair Corralation between National Beverage and ZURICH INSURANCE

Assuming the 90 days horizon National Beverage is expected to generate 3.71 times less return on investment than ZURICH INSURANCE. In addition to that, National Beverage is 1.75 times more volatile than ZURICH INSURANCE GROUP. It trades about 0.02 of its total potential returns per unit of risk. ZURICH INSURANCE GROUP is currently generating about 0.12 per unit of volatility. If you would invest  2,700  in ZURICH INSURANCE GROUP on October 10, 2024 and sell it today you would earn a total of  180.00  from holding ZURICH INSURANCE GROUP or generate 6.67% return on investment over 90 days.

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

National Beverage Corp  vs.  ZURICH INSURANCE GROUP

National Beverage Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in National Beverage Corp are ranked lower than 1 (%) 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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ZURICH INSURANCE

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZURICH INSURANCE GROUP are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, ZURICH INSURANCE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with National Beverage and ZURICH INSURANCE

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

The idea behind National Beverage Corp and ZURICH INSURANCE GROUP 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.