Correlation Between Biglari Holdings and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and National CineMedia 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 Biglari Holdings and National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and National CineMedia, you can compare the effects of market volatilities on Biglari Holdings and National CineMedia 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 Biglari Holdings with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and National CineMedia.
Diversification Opportunities for Biglari Holdings and National CineMedia
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Biglari and National is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Biglari Holdings 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 Biglari Holdings are associated (or correlated) with National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and National CineMedia go up and down completely randomly.
Pair Corralation between Biglari Holdings and National CineMedia
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 0.99 times more return on investment than National CineMedia. However, Biglari Holdings is 1.01 times less risky than National CineMedia. It trades about 0.35 of its potential returns per unit of risk. National CineMedia is currently generating about -0.06 per unit of risk. If you would invest 17,300 in Biglari Holdings on August 31, 2024 and sell it today you would earn a total of 4,200 from holding Biglari Holdings or generate 24.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. National CineMedia
Performance |
| Timeline |
| Biglari Holdings |
| National CineMedia |
Biglari Holdings and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and National CineMedia
The main advantage of trading using opposite Biglari Holdings and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, National CineMedia 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 CineMedia will offset losses from the drop in National CineMedia's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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