Correlation Between National CineMedia and Zedge
Can any of the company-specific risk be diversified away by investing in both National CineMedia and Zedge 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 Zedge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Zedge Inc, you can compare the effects of market volatilities on National CineMedia and Zedge 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 Zedge. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Zedge.
Diversification Opportunities for National CineMedia and Zedge
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Zedge is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Zedge Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedge Inc 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 Zedge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zedge Inc has no effect on the direction of National CineMedia i.e., National CineMedia and Zedge go up and down completely randomly.
Pair Corralation between National CineMedia and Zedge
Given the investment horizon of 90 days National CineMedia is expected to generate 0.86 times more return on investment than Zedge. However, National CineMedia is 1.16 times less risky than Zedge. It trades about -0.05 of its potential returns per unit of risk. Zedge Inc is currently generating about -0.19 per unit of risk. If you would invest 720.00 in National CineMedia on August 28, 2024 and sell it today you would lose (29.00) from holding National CineMedia or give up 4.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
National CineMedia vs. Zedge Inc
Performance |
| Timeline |
| National CineMedia |
| Zedge Inc |
National CineMedia and Zedge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Zedge
The main advantage of trading using opposite National CineMedia and Zedge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, Zedge 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 Zedge will offset losses from the drop in Zedge'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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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