Correlation Between Snipp Interactive and National CineMedia

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

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

Diversification Opportunities for Snipp Interactive and National CineMedia

0.34

Correlation Coefficient

Snipp Interactive  National CineMedia

Weak diversification

The 3 months correlation between Snipp and National is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Snipp Interactive and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Snipp Interactive 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 Snipp Interactive are associated (or correlated) with National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of Snipp Interactive i.e., Snipp Interactive and National CineMedia go up and down completely randomly.

Pair Corralation between Snipp Interactive and National CineMedia

Assuming the 90 days horizon Snipp Interactive is expected to generate 1.41 times less return on investment than National CineMedia. In addition to that, Snipp Interactive is 2.19 times more volatile than National CineMedia. It trades about 0.05 of its total potential returns per unit of risk. National CineMedia is currently generating about 0.14 per unit of volatility. If you would invest  439.00  in National CineMedia on September 19, 2024 and sell it today you would earn a total of  269.00  from holding National CineMedia or generate 61.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

Snipp Interactive  vs.  National CineMedia

Snipp Interactive

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Snipp Interactive are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Snipp Interactive reported solid returns over the last few months and may actually be approaching a breakup point.

National CineMedia

Risk-Adjusted Performance

0 of 100

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

Pair Trading with Snipp Interactive and National CineMedia

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

The idea behind Snipp Interactive and National CineMedia 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.