Correlation Between National CineMedia and Nexxen International
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Nexxen International 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 Nexxen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Nexxen International, you can compare the effects of market volatilities on National CineMedia and Nexxen International 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 Nexxen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Nexxen International.
Diversification Opportunities for National CineMedia and Nexxen International
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and Nexxen is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Nexxen International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexxen International 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 Nexxen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexxen International has no effect on the direction of National CineMedia i.e., National CineMedia and Nexxen International go up and down completely randomly.
Pair Corralation between National CineMedia and Nexxen International
Given the investment horizon of 90 days National CineMedia is expected to under-perform the Nexxen International. But the stock apears to be less risky and, when comparing its historical volatility, National CineMedia is 1.85 times less risky than Nexxen International. The stock trades about -0.06 of its potential returns per unit of risk. The Nexxen International is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 833.00 in Nexxen International on August 31, 2024 and sell it today you would earn a total of 151.00 from holding Nexxen International or generate 18.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. Nexxen International
Performance |
| Timeline |
| National CineMedia |
| Nexxen International |
National CineMedia and Nexxen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Nexxen International
The main advantage of trading using opposite National CineMedia and Nexxen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Nexxen International 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 Nexxen International will offset losses from the drop in Nexxen International's long position.| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
| Nexxen International vs. Mirriad Advertising plc | Nexxen International vs. INEO Tech Corp | Nexxen International vs. Marchex | Nexxen International vs. Entravision Communications |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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