Correlation Between National CineMedia and East Africa
Can any of the company-specific risk be diversified away by investing in both National CineMedia and East Africa 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 East Africa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and East Africa Metals, you can compare the effects of market volatilities on National CineMedia and East Africa 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 East Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and East Africa.
Diversification Opportunities for National CineMedia and East Africa
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and East is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and East Africa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Africa Metals 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 East Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Africa Metals has no effect on the direction of National CineMedia i.e., National CineMedia and East Africa go up and down completely randomly.
Pair Corralation between National CineMedia and East Africa
If you would invest 666.00 in National CineMedia on September 14, 2024 and sell it today you would earn a total of 71.00 from holding National CineMedia or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
National CineMedia vs. East Africa Metals
Performance |
| Timeline |
| National CineMedia |
| East Africa Metals |
National CineMedia and East Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and East Africa
The main advantage of trading using opposite National CineMedia and East Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, East Africa 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 East Africa will offset losses from the drop in East Africa'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 |
| East Africa vs. Pasinex Resources Limited | East Africa vs. Commander Resources | East Africa vs. Forsys Metals Corp | East Africa vs. American CuMo Mining |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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