Correlation Between Impax Asset and National Beverage

Can any of the company-specific risk be diversified away by investing in both Impax Asset and National Beverage 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 Impax Asset and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Impax Asset Management and National Beverage Corp, you can compare the effects of market volatilities on Impax Asset and National Beverage 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 Impax Asset with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Asset and National Beverage.

Diversification Opportunities for Impax Asset and National Beverage

0.7

Correlation Coefficient

Impax Asset  National Beverage

Poor diversification

The 3 months correlation between Impax and National is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp and Impax Asset 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 Impax Asset Management are associated (or correlated) with National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Impax Asset i.e., Impax Asset and National Beverage go up and down completely randomly.

Pair Corralation between Impax Asset and National Beverage

Assuming the 90 days trading horizon Impax Asset Management is expected to generate 1.36 times more return on investment than National Beverage. However, Impax Asset is 1.36 times more volatile than National Beverage Corp. It trades about 0.3 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.07 per unit of risk. If you would invest  13,550  in Impax Asset Management on April 24, 2025 and sell it today you would earn a total of  7,150  from holding Impax Asset Management or generate 52.77% return on investment over 90 days.

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

Impax Asset Management  vs.  National Beverage Corp

Impax Asset Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Impax Asset Management are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Impax Asset exhibited solid returns over the last few months and may actually be approaching a breakup point.

National Beverage Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in National Beverage Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, National Beverage may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Impax Asset and National Beverage

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

The idea behind Impax Asset Management and National Beverage 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.