Correlation Between National CineMedia and ReposiTrak
Can any of the company-specific risk be diversified away by investing in both National CineMedia and ReposiTrak 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 ReposiTrak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and ReposiTrak, you can compare the effects of market volatilities on National CineMedia and ReposiTrak 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 ReposiTrak. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and ReposiTrak.
Diversification Opportunities for National CineMedia and ReposiTrak
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between National and ReposiTrak is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and ReposiTrak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReposiTrak 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 ReposiTrak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReposiTrak has no effect on the direction of National CineMedia i.e., National CineMedia and ReposiTrak go up and down completely randomly.
Pair Corralation between National CineMedia and ReposiTrak
Given the investment horizon of 90 days National CineMedia is expected to generate 1.49 times more return on investment than ReposiTrak. However, National CineMedia is 1.49 times more volatile than ReposiTrak. It trades about 0.07 of its potential returns per unit of risk. ReposiTrak is currently generating about -0.1 per unit of risk. If you would invest 648.00 in National CineMedia on October 25, 2024 and sell it today you would earn a total of 22.00 from holding National CineMedia or generate 3.4% 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. ReposiTrak
Performance |
| Timeline |
| National CineMedia |
| ReposiTrak |
National CineMedia and ReposiTrak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and ReposiTrak
The main advantage of trading using opposite National CineMedia and ReposiTrak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, ReposiTrak 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 ReposiTrak will offset losses from the drop in ReposiTrak'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 |
| ReposiTrak vs. Freedom Internet Group | ReposiTrak vs. GMO Internet | ReposiTrak vs. Radcom | ReposiTrak vs. Zhihu Inc ADR |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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