Correlation Between National CineMedia and Australian Oilseeds
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Australian Oilseeds 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 Australian Oilseeds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Australian Oilseeds Holdings, you can compare the effects of market volatilities on National CineMedia and Australian Oilseeds 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 Australian Oilseeds. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Australian Oilseeds.
Diversification Opportunities for National CineMedia and Australian Oilseeds
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Australian is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Australian Oilseeds Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Oilseeds 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 Australian Oilseeds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Oilseeds has no effect on the direction of National CineMedia i.e., National CineMedia and Australian Oilseeds go up and down completely randomly.
Pair Corralation between National CineMedia and Australian Oilseeds
Given the investment horizon of 90 days National CineMedia is expected to generate 2.84 times less return on investment than Australian Oilseeds. But when comparing it to its historical volatility, National CineMedia is 2.72 times less risky than Australian Oilseeds. It trades about 0.07 of its potential returns per unit of risk. Australian Oilseeds Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 113.00 in Australian Oilseeds Holdings on October 25, 2024 and sell it today you would earn a total of 7.00 from holding Australian Oilseeds Holdings or generate 6.19% 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. Australian Oilseeds Holdings
Performance |
| Timeline |
| National CineMedia |
| Australian Oilseeds |
National CineMedia and Australian Oilseeds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Australian Oilseeds
The main advantage of trading using opposite National CineMedia and Australian Oilseeds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Australian Oilseeds 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 Australian Oilseeds will offset losses from the drop in Australian Oilseeds' 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 |
| Australian Oilseeds vs. Dine Brands Global | Australian Oilseeds vs. Douglas Emmett | Australian Oilseeds vs. One Group Hospitality | Australian Oilseeds vs. Vornado Realty Trust |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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