Correlation Between National Beverage and ASTRA INTERNATIONAL

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

Diversification Opportunities for National Beverage and ASTRA INTERNATIONAL

-0.14

Correlation Coefficient

National Beverage  ASTRA INTERNATIONAL

Good diversification

The 3 months correlation between National and ASTRA is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and ASTRA INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTRA INTERNATIONAL has no effect on the direction of National Beverage i.e., National Beverage and ASTRA INTERNATIONAL go up and down completely randomly.

Pair Corralation between National Beverage and ASTRA INTERNATIONAL

Assuming the 90 days horizon National Beverage Corp is expected to generate 0.9 times more return on investment than ASTRA INTERNATIONAL. However, National Beverage Corp is 1.11 times less risky than ASTRA INTERNATIONAL. It trades about -0.07 of its potential returns per unit of risk. ASTRA INTERNATIONAL is currently generating about -0.07 per unit of risk. If you would invest  4,500  in National Beverage Corp on September 23, 2024 and sell it today you would lose (140.00) from holding National Beverage Corp or give up 3.11% of portfolio value over 90 days.

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

National Beverage Corp  vs.  ASTRA INTERNATIONAL

National Beverage Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in National Beverage Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, National Beverage is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ASTRA INTERNATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASTRA INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, ASTRA INTERNATIONAL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with National Beverage and ASTRA INTERNATIONAL

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

The idea behind National Beverage Corp and ASTRA INTERNATIONAL 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.