Correlation Between National CineMedia and Impact Fusion
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Impact Fusion 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 Impact Fusion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Impact Fusion International, you can compare the effects of market volatilities on National CineMedia and Impact Fusion 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 Impact Fusion. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Impact Fusion.
Diversification Opportunities for National CineMedia and Impact Fusion
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and Impact is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Impact Fusion International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact Fusion Intern 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 Impact Fusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact Fusion Intern has no effect on the direction of National CineMedia i.e., National CineMedia and Impact Fusion go up and down completely randomly.
Pair Corralation between National CineMedia and Impact Fusion
Given the investment horizon of 90 days National CineMedia is expected to generate 0.45 times more return on investment than Impact Fusion. However, National CineMedia is 2.22 times less risky than Impact Fusion. It trades about 0.25 of its potential returns per unit of risk. Impact Fusion International is currently generating about -0.4 per unit of risk. If you would invest 623.00 in National CineMedia on November 9, 2024 and sell it today you would earn a total of 79.00 from holding National CineMedia or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. Impact Fusion International
Performance |
| Timeline |
| National CineMedia |
| Impact Fusion Intern |
National CineMedia and Impact Fusion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Impact Fusion
The main advantage of trading using opposite National CineMedia and Impact Fusion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Impact Fusion 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 Impact Fusion will offset losses from the drop in Impact Fusion'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 |
| Impact Fusion vs. Digital Brand Media | Impact Fusion vs. Beyond Commerce | Impact Fusion vs. Glory Star New | Impact Fusion vs. Baosheng Media 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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