Correlation Between National CineMedia and HNI Corp
Can any of the company-specific risk be diversified away by investing in both National CineMedia and HNI Corp 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 HNI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and HNI Corp, you can compare the effects of market volatilities on National CineMedia and HNI Corp 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 HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and HNI Corp.
Diversification Opportunities for National CineMedia and HNI Corp
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and HNI is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp 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 HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of National CineMedia i.e., National CineMedia and HNI Corp go up and down completely randomly.
Pair Corralation between National CineMedia and HNI Corp
Given the investment horizon of 90 days National CineMedia is expected to generate 1.91 times more return on investment than HNI Corp. However, National CineMedia is 1.91 times more volatile than HNI Corp. It trades about 0.09 of its potential returns per unit of risk. HNI Corp is currently generating about 0.06 per unit of risk. If you would invest 375.00 in National CineMedia on November 3, 2024 and sell it today you would earn a total of 284.00 from holding National CineMedia or generate 75.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. HNI Corp
Performance |
| Timeline |
| National CineMedia |
| HNI Corp |
National CineMedia and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and HNI Corp
The main advantage of trading using opposite National CineMedia and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, HNI Corp 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 HNI Corp will offset losses from the drop in HNI Corp'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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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