Correlation Between National Beverage and Awaysis Capital

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

Diversification Opportunities for National Beverage and Awaysis Capital

-0.11

Correlation Coefficient

National Beverage  Awaysis Capital

Good diversification

The 3 months correlation between National and Awaysis is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Awaysis Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awaysis Capital 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 Awaysis Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awaysis Capital has no effect on the direction of National Beverage i.e., National Beverage and Awaysis Capital go up and down completely randomly.

Pair Corralation between National Beverage and Awaysis Capital

Given the investment horizon of 90 days National Beverage Corp is expected to under-perform the Awaysis Capital. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 15.84 times less risky than Awaysis Capital. The stock trades about -0.06 of its potential returns per unit of risk. The Awaysis Capital is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  26.00  in Awaysis Capital on December 27, 2024 and sell it today you would lose (5.00) from holding Awaysis Capital or give up 19.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

National Beverage Corp  vs.  Awaysis Capital

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. In spite of fairly strong basic indicators, National Beverage is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Awaysis Capital

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Awaysis Capital are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental indicators, Awaysis Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Beverage and Awaysis Capital

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

The idea behind National Beverage Corp and Awaysis Capital 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.