Correlation Between National CineMedia and Proficient Auto
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Proficient Auto 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 Proficient Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Proficient Auto Logistics,, you can compare the effects of market volatilities on National CineMedia and Proficient Auto 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 Proficient Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Proficient Auto.
Diversification Opportunities for National CineMedia and Proficient Auto
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Proficient is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Proficient Auto Logistics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proficient Auto Logi 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 Proficient Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proficient Auto Logi has no effect on the direction of National CineMedia i.e., National CineMedia and Proficient Auto go up and down completely randomly.
Pair Corralation between National CineMedia and Proficient Auto
Given the investment horizon of 90 days National CineMedia is expected to generate 5.18 times less return on investment than Proficient Auto. But when comparing it to its historical volatility, National CineMedia is 1.08 times less risky than Proficient Auto. It trades about 0.09 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 803.00 in Proficient Auto Logistics, on October 28, 2024 and sell it today you would earn a total of 228.00 from holding Proficient Auto Logistics, or generate 28.39% 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. Proficient Auto Logistics,
Performance |
| Timeline |
| National CineMedia |
| Proficient Auto Logi |
National CineMedia and Proficient Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Proficient Auto
The main advantage of trading using opposite National CineMedia and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Proficient Auto 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 Proficient Auto will offset losses from the drop in Proficient Auto'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 |
| Proficient Auto vs. Shake Shack | Proficient Auto vs. Park Hotels Resorts | Proficient Auto vs. Weibo Corp | Proficient Auto vs. National CineMedia |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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