Correlation Between National CineMedia and United Parks
Can any of the company-specific risk be diversified away by investing in both National CineMedia and United Parks 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 United Parks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and United Parks Resorts, you can compare the effects of market volatilities on National CineMedia and United Parks 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 United Parks. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and United Parks.
Diversification Opportunities for National CineMedia and United Parks
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and United is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts 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 United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of National CineMedia i.e., National CineMedia and United Parks go up and down completely randomly.
Pair Corralation between National CineMedia and United Parks
Given the investment horizon of 90 days National CineMedia is expected to generate 1.61 times more return on investment than United Parks. However, National CineMedia is 1.61 times more volatile than United Parks Resorts. It trades about 0.04 of its potential returns per unit of risk. United Parks Resorts is currently generating about -0.25 per unit of risk. If you would invest 661.00 in National CineMedia on November 2, 2024 and sell it today you would earn a total of 10.00 from holding National CineMedia or generate 1.51% 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. United Parks Resorts
Performance |
| Timeline |
| National CineMedia |
| United Parks Resorts |
National CineMedia and United Parks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and United Parks
The main advantage of trading using opposite National CineMedia and United Parks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, United Parks 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 United Parks will offset losses from the drop in United Parks' 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 |
| United Parks vs. Aperture Health | United Parks vs. Regeneron Pharmaceuticals | United Parks vs. Diageo PLC ADR | United Parks vs. Constellation Brands Class |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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