Correlation Between National CineMedia and Brunswick
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Brunswick 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 Brunswick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Brunswick, you can compare the effects of market volatilities on National CineMedia and Brunswick 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 Brunswick. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Brunswick.
Diversification Opportunities for National CineMedia and Brunswick
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and Brunswick is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick 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 Brunswick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick has no effect on the direction of National CineMedia i.e., National CineMedia and Brunswick go up and down completely randomly.
Pair Corralation between National CineMedia and Brunswick
Given the investment horizon of 90 days National CineMedia is expected to generate 3.66 times more return on investment than Brunswick. However, National CineMedia is 3.66 times more volatile than Brunswick. It trades about 0.04 of its potential returns per unit of risk. Brunswick is currently generating about 0.03 per unit of risk. If you would invest 436.00 in National CineMedia on August 26, 2024 and sell it today you would earn a total of 252.00 from holding National CineMedia or generate 57.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. Brunswick
Performance |
| Timeline |
| National CineMedia |
| Brunswick |
National CineMedia and Brunswick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Brunswick
The main advantage of trading using opposite National CineMedia and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Brunswick 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 Brunswick will offset losses from the drop in Brunswick's long position.| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Impact Fusion International | National CineMedia vs. ZW Data Action |
| Brunswick vs. MCBC Holdings | Brunswick vs. Winnebago Industries | Brunswick vs. LCI Industries | Brunswick vs. Thor Industries |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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