Correlation Between National CineMedia and Intchains Group

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

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

Diversification Opportunities for National CineMedia and Intchains Group

0.14

Correlation Coefficient

National CineMedia  Intchains Group

Average diversification

The 3 months correlation between National and Intchains is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains 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 Intchains Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intchains Group has no effect on the direction of National CineMedia i.e., National CineMedia and Intchains Group go up and down completely randomly.

Pair Corralation between National CineMedia and Intchains Group

Given the investment horizon of 90 days National CineMedia is expected to under-perform the Intchains Group. But the stock apears to be less risky and, when comparing its historical volatility, National CineMedia is 3.7 times less risky than Intchains Group. The stock trades about -0.05 of its potential returns per unit of risk. The Intchains Group Limited is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  718.00  in Intchains Group Limited on December 22, 2024 and sell it today you would lose (299.00) from holding Intchains Group Limited or give up 41.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

National CineMedia  vs.  Intchains Group Limited

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.

Intchains Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intchains Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Intchains Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with National CineMedia and Intchains Group

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

The idea behind National CineMedia and Intchains Group Limited 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.