Correlation Between 91324PEH1 and National Beverage

Can any of the company-specific risk be diversified away by investing in both 91324PEH1 and National Beverage 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 91324PEH1 and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UNH 4 15 MAY 29 and National Beverage Corp, you can compare the effects of market volatilities on 91324PEH1 and National Beverage 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 91324PEH1 with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of 91324PEH1 and National Beverage.

Diversification Opportunities for 91324PEH1 and National Beverage

-0.31

Correlation Coefficient

91324PEH1  National Beverage

Very good diversification

The 3 months correlation between 91324PEH1 and National is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding UNH 4 15 MAY 29 and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp and 91324PEH1 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 UNH 4 15 MAY 29 are associated (or correlated) with National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of 91324PEH1 i.e., 91324PEH1 and National Beverage go up and down completely randomly.

Pair Corralation between 91324PEH1 and National Beverage

Assuming the 90 days trading horizon UNH 4 15 MAY 29 is expected to under-perform the National Beverage. But the bond apears to be less risky and, when comparing its historical volatility, UNH 4 15 MAY 29 is 2.05 times less risky than National Beverage. The bond trades about -0.27 of its potential returns per unit of risk. The National Beverage Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  4,732  in National Beverage Corp on September 18, 2024 and sell it today you would lose (80.00) from holding National Beverage Corp or give up 1.69% of portfolio value over 90 days.

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

UNH 4 15 MAY 29  vs.  National Beverage Corp

91324PEH1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNH 4 15 MAY 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for UNH 4 15 MAY 29 investors.

National Beverage Corp

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in National Beverage Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, National Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 91324PEH1 and National Beverage

The main advantage of trading using opposite 91324PEH1 and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 91324PEH1 position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.

The idea behind UNH 4 15 MAY 29 and National Beverage Corp 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.