Correlation Between National CineMedia and VF

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

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

Diversification Opportunities for National CineMedia and VF

-0.04

Correlation Coefficient

National CineMedia  VF

Good diversification

The 3 months correlation between National and VF is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and VF Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VF Corporation 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 VF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VF Corporation has no effect on the direction of National CineMedia i.e., National CineMedia and VF go up and down completely randomly.

Pair Corralation between National CineMedia and VF

Given the investment horizon of 90 days National CineMedia is expected to under-perform the VF. In addition to that, National CineMedia is 1.07 times more volatile than VF Corporation. It trades about -0.28 of its total potential returns per unit of risk. VF Corporation is currently generating about 0.05 per unit of volatility. If you would invest  2,125  in VF Corporation on October 10, 2024 and sell it today you would earn a total of  32.00  from holding VF Corporation or generate 1.51% return on investment over 90 days.

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

National CineMedia  vs.  VF Corp.

National CineMedia

Risk-Adjusted Performance

0 of 100

Insignificant

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 latest stock price confusion, may contribute to short-horizon losses for the traders.

VF Corporation

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VF Corporation are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, VF may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with National CineMedia and VF

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

The idea behind National CineMedia and VF Corporation 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.