Correlation Between Hub Cyber and National CineMedia

Can any of the company-specific risk be diversified away by investing in both Hub Cyber 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 Hub Cyber and National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hub Cyber Security and National CineMedia, you can compare the effects of market volatilities on Hub Cyber 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 Hub Cyber with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hub Cyber and National CineMedia.

Diversification Opportunities for Hub Cyber and National CineMedia

0.39

Correlation Coefficient

Hub Cyber  National CineMedia

Weak diversification

The 3 months correlation between Hub and National is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hub Cyber Security and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Hub Cyber 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 Hub Cyber Security 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 Hub Cyber i.e., Hub Cyber and National CineMedia go up and down completely randomly.

Pair Corralation between Hub Cyber and National CineMedia

Assuming the 90 days horizon Hub Cyber Security is expected to under-perform the National CineMedia. In addition to that, Hub Cyber is 5.78 times more volatile than National CineMedia. It trades about -0.01 of its total potential returns per unit of risk. National CineMedia is currently generating about -0.02 per unit of volatility. If you would invest  658.00  in National CineMedia on December 27, 2024 and sell it today you would lose (53.00) from holding National CineMedia or give up 8.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hub Cyber Security  vs.  National CineMedia

Hub Cyber Security

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hub Cyber Security has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

National CineMedia

Risk-Adjusted Performance

Very Weak

Over the last 90 days National CineMedia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, National CineMedia is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Hub Cyber and National CineMedia

The main advantage of trading using opposite Hub Cyber and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hub Cyber 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.

The idea behind Hub Cyber Security and National CineMedia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.