Correlation Between National CineMedia and Stagwell
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Stagwell 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 Stagwell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Stagwell, you can compare the effects of market volatilities on National CineMedia and Stagwell 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 Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Stagwell.
Diversification Opportunities for National CineMedia and Stagwell
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Stagwell is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of National CineMedia i.e., National CineMedia and Stagwell go up and down completely randomly.
Pair Corralation between National CineMedia and Stagwell
Given the investment horizon of 90 days National CineMedia is expected to under-perform the Stagwell. In addition to that, National CineMedia is 1.13 times more volatile than Stagwell. It trades about -0.01 of its total potential returns per unit of risk. Stagwell is currently generating about 0.4 per unit of volatility. If you would invest 625.00 in Stagwell on August 24, 2024 and sell it today you would earn a total of 161.00 from holding Stagwell or generate 25.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. Stagwell
Performance |
| Timeline |
| National CineMedia |
| Stagwell |
National CineMedia and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Stagwell
The main advantage of trading using opposite National CineMedia and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell'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 Stocks Directory module to find actively traded stocks across global markets.
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