Correlation Between National CineMedia and Avient Corp
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Avient Corp 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 National CineMedia and Avient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Avient Corp, you can compare the effects of market volatilities on National CineMedia and Avient Corp 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 National CineMedia with a short position of Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Avient Corp.
Diversification Opportunities for National CineMedia and Avient Corp
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Avient is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and National CineMedia 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 National CineMedia are associated (or correlated) with Avient Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avient Corp has no effect on the direction of National CineMedia i.e., National CineMedia and Avient Corp go up and down completely randomly.
Pair Corralation between National CineMedia and Avient Corp
Given the investment horizon of 90 days National CineMedia is expected to under-perform the Avient Corp. In addition to that, National CineMedia is 1.6 times more volatile than Avient Corp. It trades about -0.04 of its total potential returns per unit of risk. Avient Corp is currently generating about 0.24 per unit of volatility. If you would invest 4,661 in Avient Corp on September 1, 2024 and sell it today you would earn a total of 464.00 from holding Avient Corp or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. Avient Corp
Performance |
| Timeline |
| National CineMedia |
| Avient Corp |
National CineMedia and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Avient Corp
The main advantage of trading using opposite National CineMedia and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Avient Corp 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 Avient Corp will offset losses from the drop in Avient Corp's long position.| National CineMedia vs. Mirriad Advertising plc | National CineMedia vs. INEO Tech Corp | National CineMedia vs. Kidoz Inc | National CineMedia vs. Marchex |
| Avient Corp vs. Axalta Coating Systems | Avient Corp vs. H B Fuller | Avient Corp vs. Quaker Chemical | Avient Corp vs. Cabot |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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