Correlation Between National Beverage and Apollo Investment

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

Diversification Opportunities for National Beverage and Apollo Investment

0.4

Correlation Coefficient

National Beverage  Apollo Investment

Very weak diversification

The 3 months correlation between National and Apollo is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment 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 Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of National Beverage i.e., National Beverage and Apollo Investment go up and down completely randomly.

Pair Corralation between National Beverage and Apollo Investment

Assuming the 90 days horizon National Beverage is expected to generate 3.39 times less return on investment than Apollo Investment. In addition to that, National Beverage is 1.31 times more volatile than Apollo Investment Corp. It trades about 0.04 of its total potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.17 per unit of volatility. If you would invest  1,000.00  in Apollo Investment Corp on April 24, 2025 and sell it today you would earn a total of  137.00  from holding Apollo Investment Corp or generate 13.7% return on investment over 90 days.

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

National Beverage Corp  vs.  Apollo Investment Corp

National Beverage Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in National Beverage Corp are ranked lower than 2 (%) 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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Apollo Investment Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Investment Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Apollo Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Beverage and Apollo Investment

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

The idea behind National Beverage Corp and Apollo Investment 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.