Correlation Between National Beverage and MetaVia

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

Diversification Opportunities for National Beverage and MetaVia

0.45

Correlation Coefficient

National Beverage  MetaVia

Very weak diversification

The 3 months correlation between National and MetaVia is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and MetaVia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaVia 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 MetaVia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaVia has no effect on the direction of National Beverage i.e., National Beverage and MetaVia go up and down completely randomly.

Pair Corralation between National Beverage and MetaVia

Given the investment horizon of 90 days National Beverage Corp is expected to under-perform the MetaVia. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 5.45 times less risky than MetaVia. The stock trades about -0.19 of its potential returns per unit of risk. The MetaVia is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  163.00  in MetaVia on October 22, 2024 and sell it today you would earn a total of  32.00  from holding MetaVia or generate 19.63% return on investment over 90 days.

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

National Beverage Corp  vs.  MetaVia

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 inconsistent 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.

MetaVia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MetaVia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat 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 MetaVia

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

The idea behind National Beverage Corp and MetaVia 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 Transaction History module to view history of all your transactions and understand their impact on performance.