Correlation Between National Beverage and Coeur Mining

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

Diversification Opportunities for National Beverage and Coeur Mining

0.03

Correlation Coefficient

National Beverage  Coeur Mining

Significant diversification

The 3 months correlation between National and Coeur is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining 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 Coeur Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coeur Mining has no effect on the direction of National Beverage i.e., National Beverage and Coeur Mining go up and down completely randomly.

Pair Corralation between National Beverage and Coeur Mining

Assuming the 90 days trading horizon National Beverage Corp is expected to generate 0.43 times more return on investment than Coeur Mining. However, National Beverage Corp is 2.34 times less risky than Coeur Mining. It trades about -0.05 of its potential returns per unit of risk. Coeur Mining is currently generating about -0.04 per unit of risk. If you would invest  4,667  in National Beverage Corp on September 28, 2024 and sell it today you would lose (264.00) from holding National Beverage Corp or give up 5.66% of portfolio value over 90 days.

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

National Beverage Corp  vs.  Coeur Mining

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 comparatively stable basic indicators, National Beverage is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Coeur Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coeur Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with National Beverage and Coeur Mining

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

The idea behind National Beverage Corp and Coeur Mining 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.