Correlation Between National Beverage and TWFG,

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

Diversification Opportunities for National Beverage and TWFG,

0.75

Correlation Coefficient

National Beverage  TWFG,

Poor diversification

The 3 months correlation between National and TWFG, is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and TWFG, Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TWFG, Class A 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 TWFG,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TWFG, Class A has no effect on the direction of National Beverage i.e., National Beverage and TWFG, go up and down completely randomly.

Pair Corralation between National Beverage and TWFG,

Given the investment horizon of 90 days National Beverage Corp is expected to under-perform the TWFG,. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 1.71 times less risky than TWFG,. The stock trades about -0.21 of its potential returns per unit of risk. The TWFG, Class A is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  3,337  in TWFG, Class A on October 9, 2024 and sell it today you would lose (483.00) from holding TWFG, Class A or give up 14.47% of portfolio value over 90 days.

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

National Beverage Corp  vs.  TWFG, Class A

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.

TWFG, Class A

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days TWFG, Class A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, TWFG, is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with National Beverage and TWFG,

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

The idea behind National Beverage Corp and TWFG, Class A 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.