Correlation Between National CineMedia and Marchex
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Marchex 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 Marchex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Marchex, you can compare the effects of market volatilities on National CineMedia and Marchex 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 Marchex. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Marchex.
Diversification Opportunities for National CineMedia and Marchex
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Marchex is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex 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 Marchex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marchex has no effect on the direction of National CineMedia i.e., National CineMedia and Marchex go up and down completely randomly.
Pair Corralation between National CineMedia and Marchex
Given the investment horizon of 90 days National CineMedia is expected to generate 2.22 times more return on investment than Marchex. However, National CineMedia is 2.22 times more volatile than Marchex. It trades about 0.04 of its potential returns per unit of risk. Marchex is currently generating about 0.02 per unit of risk. If you would invest 409.00 in National CineMedia on August 27, 2024 and sell it today you would earn a total of 279.00 from holding National CineMedia or generate 68.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. Marchex
Performance |
| Timeline |
| National CineMedia |
| Marchex |
National CineMedia and Marchex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Marchex
The main advantage of trading using opposite National CineMedia and Marchex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Marchex 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 Marchex will offset losses from the drop in Marchex's long position.| National CineMedia vs. Mirriad Advertising plc | National CineMedia vs. INEO Tech Corp | National CineMedia vs. Innovid Corp | National CineMedia vs. Townsquare Media |
| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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