Correlation Between National CineMedia and Duluth Holdings
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Duluth Holdings 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 Duluth Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Duluth Holdings, you can compare the effects of market volatilities on National CineMedia and Duluth Holdings 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 Duluth Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Duluth Holdings.
Diversification Opportunities for National CineMedia and Duluth Holdings
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and Duluth is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Duluth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duluth Holdings 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 Duluth Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duluth Holdings has no effect on the direction of National CineMedia i.e., National CineMedia and Duluth Holdings go up and down completely randomly.
Pair Corralation between National CineMedia and Duluth Holdings
Given the investment horizon of 90 days National CineMedia is expected to under-perform the Duluth Holdings. But the stock apears to be less risky and, when comparing its historical volatility, National CineMedia is 1.07 times less risky than Duluth Holdings. The stock trades about -0.06 of its potential returns per unit of risk. The Duluth Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 371.00 in Duluth Holdings on August 29, 2024 and sell it today you would earn a total of 18.00 from holding Duluth Holdings or generate 4.85% 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. Duluth Holdings
Performance |
| Timeline |
| National CineMedia |
| Duluth Holdings |
National CineMedia and Duluth Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Duluth Holdings
The main advantage of trading using opposite National CineMedia and Duluth Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Duluth Holdings 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 Duluth Holdings will offset losses from the drop in Duluth Holdings' long position.| National CineMedia vs. Capital Income Builder | National CineMedia vs. Direxion Daily FTSE | National CineMedia vs. Dodge Global Stock | National CineMedia vs. Collegium Pharmaceutical |
| Duluth Holdings vs. Zumiez Inc | Duluth Holdings vs. JJill Inc | Duluth Holdings vs. Shoe Carnival | Duluth Holdings vs. Cato Corporation |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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