Correlation Between National CineMedia and Alta Global

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

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

Diversification Opportunities for National CineMedia and Alta Global

0.32

Correlation Coefficient

National CineMedia  Alta Global

Weak diversification

The 3 months correlation between National and Alta is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Alta Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Global 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 Alta Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Global Group has no effect on the direction of National CineMedia i.e., National CineMedia and Alta Global go up and down completely randomly.

Pair Corralation between National CineMedia and Alta Global

Given the investment horizon of 90 days National CineMedia is expected to generate 0.38 times more return on investment than Alta Global. However, National CineMedia is 2.63 times less risky than Alta Global. It trades about -0.01 of its potential returns per unit of risk. Alta Global Group is currently generating about -0.03 per unit of risk. If you would invest  644.00  in National CineMedia on December 28, 2024 and sell it today you would lose (40.00) from holding National CineMedia or give up 6.21% of portfolio value over 90 days.

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

National CineMedia  vs.  Alta Global 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 fairly strong primary indicators, National CineMedia is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Alta Global Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alta Global Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with National CineMedia and Alta Global

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

The idea behind National CineMedia and Alta Global 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..