Correlation Between Mill City and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Mill City 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 Mill City and National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mill City Ventures and National CineMedia, you can compare the effects of market volatilities on Mill City 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 Mill City with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mill City and National CineMedia.
Diversification Opportunities for Mill City and National CineMedia
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mill and National is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Mill City 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 Mill City Ventures 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 Mill City i.e., Mill City and National CineMedia go up and down completely randomly.
Pair Corralation between Mill City and National CineMedia
Given the investment horizon of 90 days Mill City Ventures is expected to generate 8.61 times more return on investment than National CineMedia. However, Mill City is 8.61 times more volatile than National CineMedia. It trades about 0.06 of its potential returns per unit of risk. National CineMedia is currently generating about 0.05 per unit of risk. If you would invest 250.00 in Mill City Ventures on August 28, 2024 and sell it today you would lose (68.00) from holding Mill City Ventures or give up 27.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.34% |
| Values | Daily Returns |
Mill City Ventures vs. National CineMedia
Performance |
| Timeline |
| Mill City Ventures |
| National CineMedia |
Mill City and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mill City and National CineMedia
The main advantage of trading using opposite Mill City and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mill City 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.| Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
| National CineMedia vs. Mirriad Advertising plc | National CineMedia vs. INEO Tech Corp | National CineMedia vs. Innovid Corp | National CineMedia vs. Townsquare Media |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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