Correlation Between Major Cineplex and Namyong Terminal

Can any of the company-specific risk be diversified away by investing in both Major Cineplex and Namyong Terminal 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 Major Cineplex and Namyong Terminal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Major Cineplex Group and Namyong Terminal PCL, you can compare the effects of market volatilities on Major Cineplex and Namyong Terminal 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 Major Cineplex with a short position of Namyong Terminal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Cineplex and Namyong Terminal.

Diversification Opportunities for Major Cineplex and Namyong Terminal

-0.87

Correlation Coefficient

Major Cineplex  Namyong Terminal

Pay attention - limited upside

The 3 months correlation between Major and Namyong is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Major Cineplex Group and Namyong Terminal PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namyong Terminal PCL and Major Cineplex 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 Major Cineplex Group are associated (or correlated) with Namyong Terminal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namyong Terminal PCL has no effect on the direction of Major Cineplex i.e., Major Cineplex and Namyong Terminal go up and down completely randomly.

Pair Corralation between Major Cineplex and Namyong Terminal

Assuming the 90 days trading horizon Major Cineplex Group is expected to under-perform the Namyong Terminal. In addition to that, Major Cineplex is 1.12 times more volatile than Namyong Terminal PCL. It trades about -0.3 of its total potential returns per unit of risk. Namyong Terminal PCL is currently generating about 0.14 per unit of volatility. If you would invest  294.00  in Namyong Terminal PCL on December 29, 2024 and sell it today you would earn a total of  40.00  from holding Namyong Terminal PCL or generate 13.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Major Cineplex Group  vs.  Namyong Terminal PCL

Major Cineplex Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Major Cineplex Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Namyong Terminal PCL

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Namyong Terminal PCL are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Namyong Terminal disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Major Cineplex and Namyong Terminal

The main advantage of trading using opposite Major Cineplex and Namyong Terminal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Cineplex position performs unexpectedly, Namyong Terminal 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 Namyong Terminal will offset losses from the drop in Namyong Terminal's long position.

The idea behind Major Cineplex Group and Namyong Terminal PCL 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.