Correlation Between National CineMedia and Lifevantage
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Lifevantage 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 Lifevantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Lifevantage, you can compare the effects of market volatilities on National CineMedia and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Lifevantage.
Diversification Opportunities for National CineMedia and Lifevantage
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and Lifevantage is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of National CineMedia i.e., National CineMedia and Lifevantage go up and down completely randomly.
Pair Corralation between National CineMedia and Lifevantage
Given the investment horizon of 90 days National CineMedia is expected to generate 4.41 times less return on investment than Lifevantage. But when comparing it to its historical volatility, National CineMedia is 1.73 times less risky than Lifevantage. It trades about 0.07 of its potential returns per unit of risk. Lifevantage is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 972.00 in Lifevantage on September 12, 2024 and sell it today you would earn a total of 488.00 from holding Lifevantage or generate 50.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. Lifevantage
Performance |
| Timeline |
| National CineMedia |
| Lifevantage |
National CineMedia and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Lifevantage
The main advantage of trading using opposite National CineMedia and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage'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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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