Correlation Between Deluxe and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Deluxe 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 Deluxe and National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deluxe and National CineMedia, you can compare the effects of market volatilities on Deluxe 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 Deluxe with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deluxe and National CineMedia.
Diversification Opportunities for Deluxe and National CineMedia
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deluxe and National is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Deluxe 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 Deluxe 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 Deluxe i.e., Deluxe and National CineMedia go up and down completely randomly.
Pair Corralation between Deluxe and National CineMedia
Considering the 90-day investment horizon Deluxe is expected to generate 1.0 times more return on investment than National CineMedia. However, Deluxe is 1.0 times less risky than National CineMedia. It trades about 0.36 of its potential returns per unit of risk. National CineMedia is currently generating about -0.04 per unit of risk. If you would invest 1,852 in Deluxe on September 1, 2024 and sell it today you would earn a total of 465.00 from holding Deluxe or generate 25.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deluxe vs. National CineMedia
Performance |
| Timeline |
| Deluxe |
| National CineMedia |
Deluxe and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deluxe and National CineMedia
The main advantage of trading using opposite Deluxe and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deluxe 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.| Deluxe vs. Criteo Sa | Deluxe vs. Emerald Expositions Events | Deluxe vs. Marchex | Deluxe vs. Integral Ad Science |
| National CineMedia vs. Mirriad Advertising plc | National CineMedia vs. INEO Tech Corp | National CineMedia vs. Kidoz Inc | National CineMedia vs. Marchex |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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