Correlation Between National CineMedia and KeyCorp
Can any of the company-specific risk be diversified away by investing in both National CineMedia and KeyCorp 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 KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and KeyCorp, you can compare the effects of market volatilities on National CineMedia and KeyCorp 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 KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and KeyCorp.
Diversification Opportunities for National CineMedia and KeyCorp
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and KeyCorp is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of National CineMedia i.e., National CineMedia and KeyCorp go up and down completely randomly.
Pair Corralation between National CineMedia and KeyCorp
Given the investment horizon of 90 days National CineMedia is expected to generate 5.78 times more return on investment than KeyCorp. However, National CineMedia is 5.78 times more volatile than KeyCorp. It trades about 0.0 of its potential returns per unit of risk. KeyCorp is currently generating about -0.09 per unit of risk. If you would invest 693.00 in National CineMedia on August 24, 2024 and sell it today you would lose (5.00) from holding National CineMedia or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. KeyCorp
Performance |
| Timeline |
| National CineMedia |
| KeyCorp |
National CineMedia and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and KeyCorp
The main advantage of trading using opposite National CineMedia and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, KeyCorp 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 KeyCorp will offset losses from the drop in KeyCorp's long position.| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Impact Fusion International | National CineMedia vs. ZW Data Action |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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