Correlation Between National CineMedia and MGO Global
Can any of the company-specific risk be diversified away by investing in both National CineMedia and MGO Global 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 MGO Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and MGO Global Common, you can compare the effects of market volatilities on National CineMedia and MGO Global 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 MGO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and MGO Global.
Diversification Opportunities for National CineMedia and MGO Global
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and MGO is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and MGO Global Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGO Global Common 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 MGO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGO Global Common has no effect on the direction of National CineMedia i.e., National CineMedia and MGO Global go up and down completely randomly.
Pair Corralation between National CineMedia and MGO Global
Given the investment horizon of 90 days National CineMedia is expected to generate 5.45 times less return on investment than MGO Global. But when comparing it to its historical volatility, National CineMedia is 9.11 times less risky than MGO Global. It trades about 0.07 of its potential returns per unit of risk. MGO Global Common is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 442.00 in MGO Global Common on August 24, 2024 and sell it today you would lose (207.00) from holding MGO Global Common or give up 46.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. MGO Global Common
Performance |
| Timeline |
| National CineMedia |
| MGO Global Common |
National CineMedia and MGO Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and MGO Global
The main advantage of trading using opposite National CineMedia and MGO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, MGO Global 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 MGO Global will offset losses from the drop in MGO Global'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 |
| MGO Global vs. Baosheng Media Group | MGO Global vs. National CineMedia | MGO Global vs. Impact Fusion International | MGO Global 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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