Correlation Between National CineMedia and Jaws Hurricane
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Jaws Hurricane 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 Jaws Hurricane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Jaws Hurricane Acquisition, you can compare the effects of market volatilities on National CineMedia and Jaws Hurricane 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 Jaws Hurricane. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Jaws Hurricane.
Diversification Opportunities for National CineMedia and Jaws Hurricane
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between National and Jaws is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Jaws Hurricane Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaws Hurricane Acqui 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 Jaws Hurricane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaws Hurricane Acqui has no effect on the direction of National CineMedia i.e., National CineMedia and Jaws Hurricane go up and down completely randomly.
Pair Corralation between National CineMedia and Jaws Hurricane
Given the investment horizon of 90 days National CineMedia is expected to generate 3.0 times less return on investment than Jaws Hurricane. But when comparing it to its historical volatility, National CineMedia is 3.87 times less risky than Jaws Hurricane. It trades about 0.05 of its potential returns per unit of risk. Jaws Hurricane Acquisition is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Jaws Hurricane Acquisition on September 3, 2024 and sell it today you would lose (12.90) from holding Jaws Hurricane Acquisition or give up 99.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 18.74% |
| Values | Daily Returns |
National CineMedia vs. Jaws Hurricane Acquisition
Performance |
| Timeline |
| National CineMedia |
| Jaws Hurricane Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
National CineMedia and Jaws Hurricane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Jaws Hurricane
The main advantage of trading using opposite National CineMedia and Jaws Hurricane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Jaws Hurricane 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 Jaws Hurricane will offset losses from the drop in Jaws Hurricane'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 |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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