Correlation Between National CineMedia and Fluent

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

By analyzing existing cross correlation between National CineMedia and Fluent Inc, you can compare the effects of market volatilities on National CineMedia and Fluent 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 Fluent. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Fluent.

Diversification Opportunities for National CineMedia and Fluent

0.26

Correlation Coefficient

National CineMedia  Fluent

Modest diversification

The 3 months correlation between National and Fluent is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc 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 Fluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluent Inc has no effect on the direction of National CineMedia i.e., National CineMedia and Fluent go up and down completely randomly.

Pair Corralation between National CineMedia and Fluent

Given the investment horizon of 90 days National CineMedia is expected to generate 1.53 times less return on investment than Fluent. But when comparing it to its historical volatility, National CineMedia is 2.11 times less risky than Fluent. It trades about 0.03 of its potential returns per unit of risk. Fluent Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  275.00  in Fluent Inc on September 3, 2024 and sell it today you would earn a total of  1.00  from holding Fluent Inc or generate 0.36% return on investment over 90 days.

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

National CineMedia  vs.  Fluent Inc

National CineMedia

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in National CineMedia are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong primary indicators, National CineMedia is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Fluent Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fluent Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fluent may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with National CineMedia and Fluent

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

The idea behind National CineMedia and Fluent Inc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.