Correlation Between Eastinco Mining and National Beverage

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

By analyzing existing cross correlation between Eastinco Mining Exploration and National Beverage Corp, you can compare the effects of market volatilities on Eastinco Mining 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 Eastinco Mining with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and National Beverage.

Diversification Opportunities for Eastinco Mining and National Beverage

-0.1

Correlation Coefficient

Eastinco Mining  National Beverage

Good diversification

The 3 months correlation between Eastinco and National is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration 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 Eastinco Mining 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 Eastinco Mining Exploration 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 Eastinco Mining i.e., Eastinco Mining and National Beverage go up and down completely randomly.

Pair Corralation between Eastinco Mining and National Beverage

Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to under-perform the National Beverage. But the stock apears to be less risky and, when comparing its historical volatility, Eastinco Mining Exploration is 1.27 times less risky than National Beverage. The stock trades about -0.12 of its potential returns per unit of risk. The National Beverage Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4,571  in National Beverage Corp on September 25, 2024 and sell it today you would lose (29.00) from holding National Beverage Corp or give up 0.63% of portfolio value over 90 days.

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

Eastinco Mining Exploration  vs.  National Beverage Corp

Eastinco Mining Expl

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with Eastinco Mining and National Beverage

The main advantage of trading using opposite Eastinco Mining and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining 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 Eastinco Mining Exploration 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.