Correlation Between National Beverage and Getty Images

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

Diversification Opportunities for National Beverage and Getty Images

0.33

Correlation Coefficient

National Beverage  Getty Images

Weak diversification

The 3 months correlation between National and Getty is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Getty Images Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Images Holdings 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 Getty Images. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Images Holdings has no effect on the direction of National Beverage i.e., National Beverage and Getty Images go up and down completely randomly.

Pair Corralation between National Beverage and Getty Images

Given the investment horizon of 90 days National Beverage Corp is expected to under-perform the Getty Images. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 6.75 times less risky than Getty Images. The stock trades about -0.27 of its potential returns per unit of risk. The Getty Images Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  228.00  in Getty Images Holdings on October 21, 2024 and sell it today you would earn a total of  47.00  from holding Getty Images Holdings or generate 20.61% return on investment over 90 days.

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

National Beverage Corp  vs.  Getty Images Holdings

National Beverage Corp

Risk-Adjusted Performance

0 of 100

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 latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Getty Images Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Images Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with National Beverage and Getty Images

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

The idea behind National Beverage Corp and Getty Images Holdings 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.