Correlation Between NATIONAL INVESTMENT and QUALITY BEVERAGES

Can any of the company-specific risk be diversified away by investing in both NATIONAL INVESTMENT and QUALITY BEVERAGES 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 INVESTMENT and QUALITY BEVERAGES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NATIONAL INVESTMENT TRUST and QUALITY BEVERAGES LTD, you can compare the effects of market volatilities on NATIONAL INVESTMENT and QUALITY BEVERAGES 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 INVESTMENT with a short position of QUALITY BEVERAGES. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL INVESTMENT and QUALITY BEVERAGES.

Diversification Opportunities for NATIONAL INVESTMENT and QUALITY BEVERAGES

-0.57

Correlation Coefficient

NATIONAL INVESTMENT  QUALITY BEVERAGES

Excellent diversification

The 3 months correlation between NATIONAL and QUALITY is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL INVESTMENT TRUST and QUALITY BEVERAGES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUALITY BEVERAGES LTD and NATIONAL INVESTMENT 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 INVESTMENT TRUST are associated (or correlated) with QUALITY BEVERAGES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUALITY BEVERAGES LTD has no effect on the direction of NATIONAL INVESTMENT i.e., NATIONAL INVESTMENT and QUALITY BEVERAGES go up and down completely randomly.

Pair Corralation between NATIONAL INVESTMENT and QUALITY BEVERAGES

Assuming the 90 days trading horizon NATIONAL INVESTMENT TRUST is expected to under-perform the QUALITY BEVERAGES. But the stock apears to be less risky and, when comparing its historical volatility, NATIONAL INVESTMENT TRUST is 1.6 times less risky than QUALITY BEVERAGES. The stock trades about -0.09 of its potential returns per unit of risk. The QUALITY BEVERAGES LTD is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,075  in QUALITY BEVERAGES LTD on December 4, 2024 and sell it today you would earn a total of  275.00  from holding QUALITY BEVERAGES LTD or generate 25.58% return on investment over 90 days.

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

NATIONAL INVESTMENT TRUST  vs.  QUALITY BEVERAGES LTD

NATIONAL INVESTMENT TRUST

Risk-Adjusted Performance

Very Weak

Over the last 90 days NATIONAL INVESTMENT TRUST has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

QUALITY BEVERAGES LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QUALITY BEVERAGES LTD are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, QUALITY BEVERAGES displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NATIONAL INVESTMENT and QUALITY BEVERAGES

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

The idea behind NATIONAL INVESTMENT TRUST and QUALITY BEVERAGES LTD 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.