Correlation Between National CineMedia and Corning Incorporated

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

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

Diversification Opportunities for National CineMedia and Corning Incorporated

0.64

Correlation Coefficient

National CineMedia  Corning Incorporated

Poor diversification

The 3 months correlation between National and Corning is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated 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 Corning Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corning Incorporated has no effect on the direction of National CineMedia i.e., National CineMedia and Corning Incorporated go up and down completely randomly.

Pair Corralation between National CineMedia and Corning Incorporated

Given the investment horizon of 90 days National CineMedia is expected to under-perform the Corning Incorporated. In addition to that, National CineMedia is 1.59 times more volatile than Corning Incorporated. It trades about -0.05 of its total potential returns per unit of risk. Corning Incorporated is currently generating about 0.03 per unit of volatility. If you would invest  4,723  in Corning Incorporated on December 21, 2024 and sell it today you would earn a total of  130.00  from holding Corning Incorporated or generate 2.75% return on investment over 90 days.

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

National CineMedia  vs.  Corning Incorporated

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.

Corning Incorporated

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Corning Incorporated are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, Corning Incorporated is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with National CineMedia and Corning Incorporated

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

The idea behind National CineMedia and Corning Incorporated 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.