Correlation Between National CineMedia and Teleflex Incorporated
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Teleflex Incorporated 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 Teleflex Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Teleflex Incorporated, you can compare the effects of market volatilities on National CineMedia and Teleflex Incorporated 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 Teleflex Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Teleflex Incorporated.
Diversification Opportunities for National CineMedia and Teleflex Incorporated
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and Teleflex is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated 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 Teleflex Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teleflex Incorporated has no effect on the direction of National CineMedia i.e., National CineMedia and Teleflex Incorporated go up and down completely randomly.
Pair Corralation between National CineMedia and Teleflex Incorporated
Given the investment horizon of 90 days National CineMedia is expected to generate 0.85 times more return on investment than Teleflex Incorporated. However, National CineMedia is 1.17 times less risky than Teleflex Incorporated. It trades about -0.05 of its potential returns per unit of risk. Teleflex Incorporated is currently generating about -0.24 per unit of risk. If you would invest 720.00 in National CineMedia on August 29, 2024 and sell it today you would lose (30.00) from holding National CineMedia or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. Teleflex Incorporated
Performance |
| Timeline |
| National CineMedia |
| Teleflex Incorporated |
National CineMedia and Teleflex Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Teleflex Incorporated
The main advantage of trading using opposite National CineMedia and Teleflex Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Teleflex Incorporated 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 Teleflex Incorporated will offset losses from the drop in Teleflex Incorporated's long position.| National CineMedia vs. Capital Income Builder | National CineMedia vs. Direxion Daily FTSE | National CineMedia vs. Dodge Global Stock | National CineMedia vs. Collegium Pharmaceutical |
| Teleflex Incorporated vs. Femasys | Teleflex Incorporated vs. Sharps Technology Warrant | Teleflex Incorporated vs. GlucoTrack | Teleflex Incorporated vs. Walt Disney |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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