Correlation Between National Beverage and Pinduoduo
Can any of the company-specific risk be diversified away by investing in both National Beverage and Pinduoduo 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 Pinduoduo 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 Pinduoduo, you can compare the effects of market volatilities on National Beverage and Pinduoduo 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 Pinduoduo. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Pinduoduo.
Diversification Opportunities for National Beverage and Pinduoduo
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Pinduoduo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Pinduoduo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinduoduo 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 Pinduoduo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinduoduo has no effect on the direction of National Beverage i.e., National Beverage and Pinduoduo go up and down completely randomly.
Pair Corralation between National Beverage and Pinduoduo
Given the investment horizon of 90 days National Beverage Corp is expected to generate 0.45 times more return on investment than Pinduoduo. However, National Beverage Corp is 2.2 times less risky than Pinduoduo. It trades about 0.23 of its potential returns per unit of risk. Pinduoduo is currently generating about 0.07 per unit of risk. If you would invest 4,623 in National Beverage Corp on March 20, 2024 and sell it today you would earn a total of 182.00 from holding National Beverage Corp or generate 3.94% 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. Pinduoduo
Performance |
Timeline |
National Beverage Corp |
Pinduoduo |
National Beverage and Pinduoduo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with National Beverage and Pinduoduo
The main advantage of trading using opposite National Beverage and Pinduoduo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Pinduoduo 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 Pinduoduo will offset losses from the drop in Pinduoduo's long position.National Beverage vs. The Coca Cola | National Beverage vs. Keurig Dr Pepper | National Beverage vs. PepsiCo | National Beverage vs. Vita Coco |
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.
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