Correlation Between National Beverage and Gelesis Holdings

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

Diversification Opportunities for National Beverage and Gelesis Holdings

0.0

Correlation Coefficient

National Beverage  Gelesis Holdings

Pay attention - limited upside

The 3 months correlation between National and Gelesis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Gelesis Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelesis 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 Gelesis Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelesis Holdings has no effect on the direction of National Beverage i.e., National Beverage and Gelesis Holdings go up and down completely randomly.

Pair Corralation between National Beverage and Gelesis Holdings

If you would invest (100.00) in Gelesis Holdings on October 7, 2024 and sell it today you would earn a total of  100.00  from holding Gelesis Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

National Beverage Corp  vs.  Gelesis 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 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.

Gelesis Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gelesis Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Gelesis Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with National Beverage and Gelesis Holdings

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

The idea behind National Beverage Corp and Gelesis 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.