Correlation Between National Beverage and Aries I

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

Diversification Opportunities for National Beverage and Aries I

0.0

Correlation Coefficient

National Beverage  Aries I

Pay attention - limited upside

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

Pair Corralation between National Beverage and Aries I

If you would invest (100.00) in Aries I Acquisition on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Aries I Acquisition 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.  Aries I Acquisition

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.

Aries I Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aries I Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Aries I is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with National Beverage and Aries I

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

The idea behind National Beverage Corp and Aries I Acquisition 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.