Correlation Between National Beverage and Take-Two Interactive

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

Diversification Opportunities for National Beverage and Take-Two Interactive

-0.06

Correlation Coefficient

National Beverage  Take-Two Interactive

Good diversification

The 3 months correlation between National and Take-Two is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive 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 Take-Two Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of National Beverage i.e., National Beverage and Take-Two Interactive go up and down completely randomly.

Pair Corralation between National Beverage and Take-Two Interactive

Assuming the 90 days horizon National Beverage Corp is expected to generate 1.17 times more return on investment than Take-Two Interactive. However, National Beverage is 1.17 times more volatile than Take Two Interactive Software. It trades about 0.04 of its potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.01 per unit of risk. If you would invest  3,820  in National Beverage Corp on April 24, 2025 and sell it today you would earn a total of  120.00  from holding National Beverage Corp or generate 3.14% 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.  Take Two Interactive Software

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.

Take Two Interactive

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Take Two Interactive Software are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Take-Two Interactive is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with National Beverage and Take-Two Interactive

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

The idea behind National Beverage Corp and Take Two Interactive Software 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.