Correlation Between National CineMedia and Voyager Acquisition

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

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

Diversification Opportunities for National CineMedia and Voyager Acquisition

-0.53

Correlation Coefficient

National CineMedia  Voyager Acquisition

Excellent diversification

The 3 months correlation between National and Voyager is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Voyager Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voyager Acquisition 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 Voyager Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voyager Acquisition Corp has no effect on the direction of National CineMedia i.e., National CineMedia and Voyager Acquisition go up and down completely randomly.

Pair Corralation between National CineMedia and Voyager Acquisition

Given the investment horizon of 90 days National CineMedia is expected to under-perform the Voyager Acquisition. In addition to that, National CineMedia is 15.63 times more volatile than Voyager Acquisition Corp. It trades about -0.04 of its total potential returns per unit of risk. Voyager Acquisition Corp is currently generating about 0.14 per unit of volatility. If you would invest  1,002  in Voyager Acquisition Corp on December 21, 2024 and sell it today you would earn a total of  18.00  from holding Voyager Acquisition Corp or generate 1.8% return on investment over 90 days.

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

National CineMedia  vs.  Voyager Acquisition 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.

Voyager Acquisition Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voyager Acquisition Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Voyager Acquisition is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with National CineMedia and Voyager Acquisition

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

The idea behind National CineMedia and Voyager Acquisition 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.