Correlation Between Gap, and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Gap, 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 Gap, and National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gap, and National CineMedia, you can compare the effects of market volatilities on Gap, 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 Gap, with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and National CineMedia.
Diversification Opportunities for Gap, and National CineMedia
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gap, and National is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Gap, 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 The Gap, 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 Gap, i.e., Gap, and National CineMedia go up and down completely randomly.
Pair Corralation between Gap, and National CineMedia
Considering the 90-day investment horizon Gap, is expected to generate 1.87 times less return on investment than National CineMedia. But when comparing it to its historical volatility, The Gap, is 2.19 times less risky than National CineMedia. It trades about 0.05 of its potential returns per unit of risk. National CineMedia is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 383.00 in National CineMedia on September 2, 2024 and sell it today you would earn a total of 312.00 from holding National CineMedia or generate 81.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gap, vs. National CineMedia
Performance |
| Timeline |
| Gap, |
| National CineMedia |
Gap, and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gap, and National CineMedia
The main advantage of trading using opposite Gap, and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, 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.| Gap, vs. Boot Barn Holdings | Gap, vs. BJs Restaurants | Gap, vs. The Cheesecake Factory | Gap, vs. GEN Restaurant Group, |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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