Correlation Between National CineMedia and SEALSQ Corp

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

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

Diversification Opportunities for National CineMedia and SEALSQ Corp

0.12

Correlation Coefficient

National CineMedia  SEALSQ Corp

Average diversification

The 3 months correlation between National and SEALSQ is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and SEALSQ Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALSQ Corp 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 SEALSQ Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALSQ Corp has no effect on the direction of National CineMedia i.e., National CineMedia and SEALSQ Corp go up and down completely randomly.

Pair Corralation between National CineMedia and SEALSQ Corp

Given the investment horizon of 90 days National CineMedia is expected to under-perform the SEALSQ Corp. But the stock apears to be less risky and, when comparing its historical volatility, National CineMedia is 4.43 times less risky than SEALSQ Corp. The stock trades about -0.04 of its potential returns per unit of risk. The SEALSQ Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  490.00  in SEALSQ Corp on December 21, 2024 and sell it today you would lose (188.00) from holding SEALSQ Corp or give up 38.37% of portfolio value over 90 days.

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

National CineMedia  vs.  SEALSQ Corp

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.

SEALSQ Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SEALSQ Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, SEALSQ Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National CineMedia and SEALSQ Corp

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

The idea behind National CineMedia and SEALSQ Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.