Correlation Between National CineMedia and Four Leaf
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Four Leaf 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 Four Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Four Leaf Acquisition, you can compare the effects of market volatilities on National CineMedia and Four Leaf 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 Four Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Four Leaf.
Diversification Opportunities for National CineMedia and Four Leaf
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and Four is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Four Leaf Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Leaf Acquisition 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 Four Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Leaf Acquisition has no effect on the direction of National CineMedia i.e., National CineMedia and Four Leaf go up and down completely randomly.
Pair Corralation between National CineMedia and Four Leaf
Given the investment horizon of 90 days National CineMedia is expected to generate 23.31 times more return on investment than Four Leaf. However, National CineMedia is 23.31 times more volatile than Four Leaf Acquisition. It trades about 0.08 of its potential returns per unit of risk. Four Leaf Acquisition is currently generating about 0.13 per unit of risk. If you would invest 398.00 in National CineMedia on September 2, 2024 and sell it today you would earn a total of 297.00 from holding National CineMedia or generate 74.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. Four Leaf Acquisition
Performance |
| Timeline |
| National CineMedia |
| Four Leaf Acquisition |
National CineMedia and Four Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Four Leaf
The main advantage of trading using opposite National CineMedia and Four Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Four Leaf 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 Four Leaf will offset losses from the drop in Four Leaf'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 |
| Four Leaf vs. Visa Class A | Four Leaf vs. Diamond Hill Investment | Four Leaf vs. Distoken Acquisition | Four Leaf vs. Associated Capital Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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