Correlation Between National CineMedia and Helio
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Helio 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 Helio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Helio, you can compare the effects of market volatilities on National CineMedia and Helio 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 Helio. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Helio.
Diversification Opportunities for National CineMedia and Helio
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Helio is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Helio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helio 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 Helio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helio has no effect on the direction of National CineMedia i.e., National CineMedia and Helio go up and down completely randomly.
Pair Corralation between National CineMedia and Helio
Given the investment horizon of 90 days National CineMedia is expected to under-perform the Helio. But the stock apears to be less risky and, when comparing its historical volatility, National CineMedia is 4.5 times less risky than Helio. The stock trades about -0.03 of its potential returns per unit of risk. The Helio is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 494.00 in Helio on November 4, 2024 and sell it today you would earn a total of 6.00 from holding Helio or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
National CineMedia vs. Helio
Performance |
| Timeline |
| National CineMedia |
| Helio |
National CineMedia and Helio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Helio
The main advantage of trading using opposite National CineMedia and Helio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Helio 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 Helio will offset losses from the drop in Helio'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 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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