Correlation Between Postal Realty and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Postal Realty and National CineMedia 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 Postal Realty and National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Realty Trust and National CineMedia, you can compare the effects of market volatilities on Postal Realty and National CineMedia 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 Postal Realty with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Realty and National CineMedia.
Diversification Opportunities for Postal Realty and National CineMedia
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Postal and National is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Postal Realty Trust and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Postal Realty 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 Postal Realty Trust are associated (or correlated) with National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of Postal Realty i.e., Postal Realty and National CineMedia go up and down completely randomly.
Pair Corralation between Postal Realty and National CineMedia
Given the investment horizon of 90 days Postal Realty Trust is expected to generate 0.42 times more return on investment than National CineMedia. However, Postal Realty Trust is 2.39 times less risky than National CineMedia. It trades about -0.08 of its potential returns per unit of risk. National CineMedia is currently generating about -0.05 per unit of risk. If you would invest 1,439 in Postal Realty Trust on August 29, 2024 and sell it today you would lose (34.00) from holding Postal Realty Trust or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Realty Trust vs. National CineMedia
Performance |
| Timeline |
| Postal Realty Trust |
| National CineMedia |
Postal Realty and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Realty and National CineMedia
The main advantage of trading using opposite Postal Realty and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Realty position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia's long position.| Postal Realty vs. Office Properties Income | Postal Realty vs. SL Green Realty | Postal Realty vs. Cousins Properties Incorporated | Postal Realty vs. Highwoods Properties |
| National CineMedia vs. Capital Income Builder | National CineMedia vs. Direxion Daily FTSE | National CineMedia vs. Dodge Global Stock | National CineMedia vs. Collegium Pharmaceutical |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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