Correlation Between National CineMedia and OCCIDENTAL

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

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

Diversification Opportunities for National CineMedia and OCCIDENTAL

-0.27

Correlation Coefficient

National CineMedia  OCCIDENTAL

Very good diversification

The 3 months correlation between National and OCCIDENTAL is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and OCCIDENTAL PETE P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCCIDENTAL PETE P 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 OCCIDENTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCCIDENTAL PETE P has no effect on the direction of National CineMedia i.e., National CineMedia and OCCIDENTAL go up and down completely randomly.

Pair Corralation between National CineMedia and OCCIDENTAL

Given the investment horizon of 90 days National CineMedia is expected to under-perform the OCCIDENTAL. In addition to that, National CineMedia is 2.84 times more volatile than OCCIDENTAL PETE P. It trades about -0.06 of its total potential returns per unit of risk. OCCIDENTAL PETE P is currently generating about 0.08 per unit of volatility. If you would invest  7,034  in OCCIDENTAL PETE P on December 31, 2024 and sell it today you would earn a total of  355.00  from holding OCCIDENTAL PETE P or generate 5.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

National CineMedia  vs.  OCCIDENTAL PETE P

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 weak performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in May 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

OCCIDENTAL PETE P

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OCCIDENTAL PETE P are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, OCCIDENTAL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with National CineMedia and OCCIDENTAL

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

The idea behind National CineMedia and OCCIDENTAL PETE P 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.