Correlation Between National CineMedia and ScanSource
Can any of the company-specific risk be diversified away by investing in both National CineMedia and ScanSource 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 ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and ScanSource, you can compare the effects of market volatilities on National CineMedia and ScanSource 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 ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and ScanSource.
Diversification Opportunities for National CineMedia and ScanSource
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between National and ScanSource is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of National CineMedia i.e., National CineMedia and ScanSource go up and down completely randomly.
Pair Corralation between National CineMedia and ScanSource
Given the investment horizon of 90 days National CineMedia is expected to generate 0.85 times more return on investment than ScanSource. However, National CineMedia is 1.17 times less risky than ScanSource. It trades about -0.11 of its potential returns per unit of risk. ScanSource is currently generating about -0.16 per unit of risk. If you would invest 691.00 in National CineMedia on September 26, 2024 and sell it today you would lose (31.00) from holding National CineMedia or give up 4.49% 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. ScanSource
Performance |
Timeline |
National CineMedia |
ScanSource |
National CineMedia and ScanSource Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with National CineMedia and ScanSource
The main advantage of trading using opposite National CineMedia and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
ScanSource vs. Climb Global Solutions | ScanSource vs. Insight Enterprises | ScanSource vs. Synnex | ScanSource vs. PC Connection |
Check out your portfolio center.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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |