Correlation Between Victorias Secret and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Victorias Secret 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 Victorias Secret and National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victorias Secret Co and National CineMedia, you can compare the effects of market volatilities on Victorias Secret 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 Victorias Secret with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victorias Secret and National CineMedia.
Diversification Opportunities for Victorias Secret and National CineMedia
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Victorias and National is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Victorias Secret Co and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Victorias Secret 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 Victorias Secret Co 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 Victorias Secret i.e., Victorias Secret and National CineMedia go up and down completely randomly.
Pair Corralation between Victorias Secret and National CineMedia
Given the investment horizon of 90 days Victorias Secret Co is expected to generate 1.91 times more return on investment than National CineMedia. However, Victorias Secret is 1.91 times more volatile than National CineMedia. It trades about 0.42 of its potential returns per unit of risk. National CineMedia is currently generating about 0.31 per unit of risk. If you would invest 3,497 in Victorias Secret Co on September 12, 2024 and sell it today you would earn a total of 1,240 from holding Victorias Secret Co or generate 35.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victorias Secret Co vs. National CineMedia
Performance |
| Timeline |
| Victorias Secret |
| National CineMedia |
Victorias Secret and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victorias Secret and National CineMedia
The main advantage of trading using opposite Victorias Secret and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victorias Secret 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.| Victorias Secret vs. Ross Stores | Victorias Secret vs. Childrens Place | Victorias Secret vs. Buckle Inc | Victorias Secret vs. Guess Inc |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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