Correlation Between National CineMedia and Baosheng Media

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

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

Diversification Opportunities for National CineMedia and Baosheng Media

0.5

Correlation Coefficient

National CineMedia  Baosheng Media

Very weak diversification

The 3 months correlation between National and Baosheng is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Baosheng Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baosheng Media Group and National CineMedia 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 National CineMedia are associated (or correlated) with Baosheng Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baosheng Media Group has no effect on the direction of National CineMedia i.e., National CineMedia and Baosheng Media go up and down completely randomly.

Pair Corralation between National CineMedia and Baosheng Media

Given the investment horizon of 90 days National CineMedia is expected to generate 0.36 times more return on investment than Baosheng Media. However, National CineMedia is 2.75 times less risky than Baosheng Media. It trades about -0.05 of its potential returns per unit of risk. Baosheng Media Group is currently generating about -0.02 per unit of risk. If you would invest  644.00  in National CineMedia on December 30, 2024 and sell it today you would lose (83.00) from holding National CineMedia or give up 12.89% of portfolio value over 90 days.

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

National CineMedia  vs.  Baosheng Media Group

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 latest weak performance, the Stock's primary indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Baosheng Media Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baosheng Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with National CineMedia and Baosheng Media

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

The idea behind National CineMedia and Baosheng Media Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.