Correlation Between National CineMedia and Nextplat Corp
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Nextplat Corp 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 Nextplat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Nextplat Corp, you can compare the effects of market volatilities on National CineMedia and Nextplat Corp 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 Nextplat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Nextplat Corp.
Diversification Opportunities for National CineMedia and Nextplat Corp
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and Nextplat is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat Corp 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 Nextplat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextplat Corp has no effect on the direction of National CineMedia i.e., National CineMedia and Nextplat Corp go up and down completely randomly.
Pair Corralation between National CineMedia and Nextplat Corp
Given the investment horizon of 90 days National CineMedia is expected to generate 0.41 times more return on investment than Nextplat Corp. However, National CineMedia is 2.44 times less risky than Nextplat Corp. It trades about -0.04 of its potential returns per unit of risk. Nextplat Corp is currently generating about -0.06 per unit of risk. If you would invest 711.00 in National CineMedia on August 26, 2024 and sell it today you would lose (23.00) from holding National CineMedia or give up 3.23% 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. Nextplat Corp
Performance |
| Timeline |
| National CineMedia |
| Nextplat Corp |
National CineMedia and Nextplat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Nextplat Corp
The main advantage of trading using opposite National CineMedia and Nextplat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Nextplat Corp 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 Nextplat Corp will offset losses from the drop in Nextplat Corp'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 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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