Correlation Between National Beverage and Golden Matrix

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

Diversification Opportunities for National Beverage and Golden Matrix

0.57

Correlation Coefficient

National Beverage  Golden Matrix

Very weak diversification

The 3 months correlation between National and Golden is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Golden Matrix Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Matrix Group 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 Golden Matrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Matrix Group has no effect on the direction of National Beverage i.e., National Beverage and Golden Matrix go up and down completely randomly.

Pair Corralation between National Beverage and Golden Matrix

Given the investment horizon of 90 days National Beverage is expected to generate 1.45 times less return on investment than Golden Matrix. But when comparing it to its historical volatility, National Beverage Corp is 3.08 times less risky than Golden Matrix. It trades about 0.01 of its potential returns per unit of risk. Golden Matrix Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  361.00  in Golden Matrix Group on September 28, 2024 and sell it today you would lose (154.00) from holding Golden Matrix Group or give up 42.66% of portfolio value over 90 days.

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

National Beverage Corp  vs.  Golden Matrix Group

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 inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Golden Matrix Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Matrix Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Golden Matrix is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with National Beverage and Golden Matrix

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

The idea behind National Beverage Corp and Golden Matrix Group 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 CEOs Directory module to screen CEOs from public companies around the world.