Correlation Between National Beverage and Bloomsbury Publishing

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

Diversification Opportunities for National Beverage and Bloomsbury Publishing

-0.09

Correlation Coefficient

National Beverage  Bloomsbury Publishing

Good diversification

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

Pair Corralation between National Beverage and Bloomsbury Publishing

Assuming the 90 days trading horizon National Beverage Corp is expected to under-perform the Bloomsbury Publishing. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 1.34 times less risky than Bloomsbury Publishing. The stock trades about -0.08 of its potential returns per unit of risk. The Bloomsbury Publishing Plc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  66,226  in Bloomsbury Publishing Plc on October 1, 2024 and sell it today you would earn a total of  1,174  from holding Bloomsbury Publishing Plc or generate 1.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

National Beverage Corp  vs.  Bloomsbury Publishing Plc

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 latest unsteady 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.

Bloomsbury Publishing Plc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bloomsbury Publishing Plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Bloomsbury Publishing is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with National Beverage and Bloomsbury Publishing

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

The idea behind National Beverage Corp and Bloomsbury Publishing Plc 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.