Correlation Between Ihuman and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Ihuman 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 Ihuman and National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ihuman Inc and National CineMedia, you can compare the effects of market volatilities on Ihuman 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 Ihuman with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and National CineMedia.
Diversification Opportunities for Ihuman and National CineMedia
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ihuman and National is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Ihuman 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 Ihuman Inc 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 Ihuman i.e., Ihuman and National CineMedia go up and down completely randomly.
Pair Corralation between Ihuman and National CineMedia
Allowing for the 90-day total investment horizon Ihuman Inc is expected to under-perform the National CineMedia. In addition to that, Ihuman is 1.04 times more volatile than National CineMedia. It trades about -0.03 of its total potential returns per unit of risk. National CineMedia is currently generating about 0.08 per unit of volatility. If you would invest 398.00 in National CineMedia on September 2, 2024 and sell it today you would earn a total of 297.00 from holding National CineMedia or generate 74.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ihuman Inc vs. National CineMedia
Performance |
| Timeline |
| Ihuman Inc |
| National CineMedia |
Ihuman and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ihuman and National CineMedia
The main advantage of trading using opposite Ihuman and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman 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.| Ihuman vs. Wah Fu Education | Ihuman vs. Golden Sun Education | Ihuman vs. Elite Education Group | Ihuman vs. American Public Education |
| 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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