Correlation Between National Beverage and Valuence Merger

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

Diversification Opportunities for National Beverage and Valuence Merger

-0.26

Correlation Coefficient

National Beverage  Valuence Merger

Very good diversification

The 3 months correlation between National and Valuence is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Valuence Merger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valuence Merger Corp 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 Valuence Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valuence Merger Corp has no effect on the direction of National Beverage i.e., National Beverage and Valuence Merger go up and down completely randomly.

Pair Corralation between National Beverage and Valuence Merger

Given the investment horizon of 90 days National Beverage Corp is expected to generate 0.79 times more return on investment than Valuence Merger. However, National Beverage Corp is 1.27 times less risky than Valuence Merger. It trades about 0.09 of its potential returns per unit of risk. Valuence Merger Corp is currently generating about -0.02 per unit of risk. If you would invest  4,434  in National Beverage Corp on September 11, 2024 and sell it today you would earn a total of  393.00  from holding National Beverage Corp or generate 8.86% return on investment over 90 days.

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

National Beverage Corp  vs.  Valuence Merger Corp

National Beverage Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National Beverage Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, National Beverage may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Valuence Merger Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Valuence Merger Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Valuence Merger is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with National Beverage and Valuence Merger

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

The idea behind National Beverage Corp and Valuence Merger 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.