Correlation Between National CineMedia and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Minerals Technologies 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 Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Minerals Technologies, you can compare the effects of market volatilities on National CineMedia and Minerals Technologies 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 Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Minerals Technologies.
Diversification Opportunities for National CineMedia and Minerals Technologies
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Minerals is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies 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 Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of National CineMedia i.e., National CineMedia and Minerals Technologies go up and down completely randomly.
Pair Corralation between National CineMedia and Minerals Technologies
Given the investment horizon of 90 days National CineMedia is expected to generate 1.61 times more return on investment than Minerals Technologies. However, National CineMedia is 1.61 times more volatile than Minerals Technologies. It trades about 0.07 of its potential returns per unit of risk. Minerals Technologies is currently generating about -0.01 per unit of risk. If you would invest 553.00 in National CineMedia on September 1, 2024 and sell it today you would earn a total of 142.00 from holding National CineMedia or generate 25.68% 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. Minerals Technologies
Performance |
| Timeline |
| National CineMedia |
| Minerals Technologies |
National CineMedia and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Minerals Technologies
The main advantage of trading using opposite National CineMedia and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| National CineMedia vs. Mirriad Advertising plc | National CineMedia vs. INEO Tech Corp | National CineMedia vs. Kidoz Inc | National CineMedia vs. Marchex |
| Minerals Technologies vs. Linde plc Ordinary | Minerals Technologies vs. Air Products and | Minerals Technologies vs. Aquagold International | Minerals Technologies vs. Thrivent High Yield |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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