Correlation Between National CineMedia and Mirriad Advertising
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Mirriad Advertising 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 Mirriad Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Mirriad Advertising plc, you can compare the effects of market volatilities on National CineMedia and Mirriad Advertising 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 Mirriad Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Mirriad Advertising.
Diversification Opportunities for National CineMedia and Mirriad Advertising
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between National and Mirriad is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Mirriad Advertising plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirriad Advertising plc 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 Mirriad Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirriad Advertising plc has no effect on the direction of National CineMedia i.e., National CineMedia and Mirriad Advertising go up and down completely randomly.
Pair Corralation between National CineMedia and Mirriad Advertising
Given the investment horizon of 90 days National CineMedia is expected to generate 0.28 times more return on investment than Mirriad Advertising. However, National CineMedia is 3.51 times less risky than Mirriad Advertising. It trades about -0.06 of its potential returns per unit of risk. Mirriad Advertising plc is currently generating about -0.21 per unit of risk. If you would invest 723.00 in National CineMedia on August 31, 2024 and sell it today you would lose (37.00) from holding National CineMedia or give up 5.12% 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. Mirriad Advertising plc
Performance |
| Timeline |
| National CineMedia |
| Mirriad Advertising plc |
National CineMedia and Mirriad Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Mirriad Advertising
The main advantage of trading using opposite National CineMedia and Mirriad Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Mirriad Advertising 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 Mirriad Advertising will offset losses from the drop in Mirriad Advertising'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 |
| Mirriad Advertising vs. INEO Tech Corp | Mirriad Advertising vs. Kidoz Inc | Mirriad Advertising vs. Marchex | Mirriad Advertising vs. Snipp Interactive |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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