Correlation Between National CineMedia and Bowhead Specialty
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Bowhead Specialty 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 Bowhead Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Bowhead Specialty Holdings, you can compare the effects of market volatilities on National CineMedia and Bowhead Specialty 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 Bowhead Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Bowhead Specialty.
Diversification Opportunities for National CineMedia and Bowhead Specialty
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and Bowhead is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Bowhead Specialty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowhead Specialty 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 Bowhead Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowhead Specialty has no effect on the direction of National CineMedia i.e., National CineMedia and Bowhead Specialty go up and down completely randomly.
Pair Corralation between National CineMedia and Bowhead Specialty
Given the investment horizon of 90 days National CineMedia is expected to under-perform the Bowhead Specialty. In addition to that, National CineMedia is 1.06 times more volatile than Bowhead Specialty Holdings. It trades about -0.45 of its total potential returns per unit of risk. Bowhead Specialty Holdings is currently generating about -0.35 per unit of volatility. If you would invest 3,637 in Bowhead Specialty Holdings on October 12, 2024 and sell it today you would lose (454.00) from holding Bowhead Specialty Holdings or give up 12.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. Bowhead Specialty Holdings
Performance |
| Timeline |
| National CineMedia |
| Bowhead Specialty |
National CineMedia and Bowhead Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Bowhead Specialty
The main advantage of trading using opposite National CineMedia and Bowhead Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Bowhead Specialty 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 Bowhead Specialty will offset losses from the drop in Bowhead Specialty's long position.| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
| Bowhead Specialty vs. National CineMedia | Bowhead Specialty vs. Weibo Corp | Bowhead Specialty vs. Imax Corp | Bowhead Specialty vs. Constellation Brands Class |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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