Correlation Between National Beverage and SOCGEN

Can any of the company-specific risk be diversified away by investing in both National Beverage and SOCGEN 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 SOCGEN 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 SOCGEN 6221 15 JUN 33, you can compare the effects of market volatilities on National Beverage and SOCGEN 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 SOCGEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and SOCGEN.

Diversification Opportunities for National Beverage and SOCGEN

-0.09

Correlation Coefficient

National Beverage  SOCGEN

Good diversification

The 3 months correlation between National and SOCGEN is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and SOCGEN 6221 15 JUN 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOCGEN 6221 15 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 SOCGEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOCGEN 6221 15 has no effect on the direction of National Beverage i.e., National Beverage and SOCGEN go up and down completely randomly.

Pair Corralation between National Beverage and SOCGEN

Given the investment horizon of 90 days National Beverage Corp is expected to under-perform the SOCGEN. In addition to that, National Beverage is 3.03 times more volatile than SOCGEN 6221 15 JUN 33. It trades about -0.21 of its total potential returns per unit of risk. SOCGEN 6221 15 JUN 33 is currently generating about -0.04 per unit of volatility. If you would invest  10,121  in SOCGEN 6221 15 JUN 33 on December 4, 2024 and sell it today you would lose (105.00) from holding SOCGEN 6221 15 JUN 33 or give up 1.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.36%
Values	Daily Returns

National Beverage Corp  vs.  SOCGEN 6221 15 JUN 33

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 inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SOCGEN 6221 15

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOCGEN 6221 15 JUN 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SOCGEN is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with National Beverage and SOCGEN

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

The idea behind National Beverage Corp and SOCGEN 6221 15 JUN 33 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.

Check out your portfolio center.

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.