Correlation Between National CineMedia and Micron Technology
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Micron Technology 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 Micron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Micron Technology, you can compare the effects of market volatilities on National CineMedia and Micron Technology 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 Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Micron Technology.
Diversification Opportunities for National CineMedia and Micron Technology
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between National and Micron is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology 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 Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of National CineMedia i.e., National CineMedia and Micron Technology go up and down completely randomly.
Pair Corralation between National CineMedia and Micron Technology
Given the investment horizon of 90 days National CineMedia is expected to generate 1.02 times more return on investment than Micron Technology. However, National CineMedia is 1.02 times more volatile than Micron Technology. It trades about -0.05 of its potential returns per unit of risk. Micron Technology is currently generating about -0.13 per unit of risk. If you would invest 717.00 in National CineMedia on August 30, 2024 and sell it today you would lose (31.00) from holding National CineMedia or give up 4.32% 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. Micron Technology
Performance |
| Timeline |
| National CineMedia |
| Micron Technology |
National CineMedia and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Micron Technology
The main advantage of trading using opposite National CineMedia and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Micron Technology 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 Micron Technology will offset losses from the drop in Micron Technology's long position.| National CineMedia vs. Mirriad Advertising plc | National CineMedia vs. INEO Tech Corp | National CineMedia vs. Kidoz Inc | National CineMedia vs. Marchex |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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