Correlation Between National CineMedia and Sound Point
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Sound Point 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 Sound Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Sound Point Meridian, you can compare the effects of market volatilities on National CineMedia and Sound Point 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 Sound Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Sound Point.
Diversification Opportunities for National CineMedia and Sound Point
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Sound is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Sound Point Meridian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sound Point Meridian 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 Sound Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sound Point Meridian has no effect on the direction of National CineMedia i.e., National CineMedia and Sound Point go up and down completely randomly.
Pair Corralation between National CineMedia and Sound Point
Given the investment horizon of 90 days National CineMedia is expected to generate 2.51 times more return on investment than Sound Point. However, National CineMedia is 2.51 times more volatile than Sound Point Meridian. It trades about 0.08 of its potential returns per unit of risk. Sound Point Meridian is currently generating about 0.02 per unit of risk. If you would invest 398.00 in National CineMedia on September 2, 2024 and sell it today you would earn a total of 297.00 from holding National CineMedia or generate 74.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 47.98% |
| Values | Daily Returns |
National CineMedia vs. Sound Point Meridian
Performance |
| Timeline |
| National CineMedia |
| Sound Point Meridian |
National CineMedia and Sound Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Sound Point
The main advantage of trading using opposite National CineMedia and Sound Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Sound Point 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 Sound Point will offset losses from the drop in Sound Point'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 |
| Sound Point vs. Atlanticus Holdings | Sound Point vs. Great Elm Capital | Sound Point vs. Aquagold International | Sound Point vs. Thrivent High Yield |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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