Correlation Between Small Cap and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Premium and National CineMedia, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and National CineMedia.
Diversification Opportunities for Small Cap and National CineMedia
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Small and National is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Premium and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Small Cap 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 Small Cap Premium 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 Small Cap i.e., Small Cap and National CineMedia go up and down completely randomly.
Pair Corralation between Small Cap and National CineMedia
Considering the 90-day investment horizon Small Cap is expected to generate 8.76 times less return on investment than National CineMedia. But when comparing it to its historical volatility, Small Cap Premium is 15.48 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 of returns per unit of risk over similar time horizon. If you would invest 390.00 in National CineMedia on September 4, 2024 and sell it today you would earn a total of 340.00 from holding National CineMedia or generate 87.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Small Cap Premium vs. National CineMedia
Performance |
| Timeline |
| Small Cap Premium |
| National CineMedia |
Small Cap and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and National CineMedia
The main advantage of trading using opposite Small Cap and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. RiverNorth Specialty Finance | Small Cap vs. Royce Micro Cap | Small Cap vs. First Trust Enhanced | Small Cap vs. Voya Global Advantage |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |