Correlation Between 91324PEQ1 and National CineMedia

Can any of the company-specific risk be diversified away by investing in both 91324PEQ1 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 91324PEQ1 and National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UNH 53 15 FEB 30 and National CineMedia, you can compare the effects of market volatilities on 91324PEQ1 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 91324PEQ1 with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of 91324PEQ1 and National CineMedia.

Diversification Opportunities for 91324PEQ1 and National CineMedia

-0.14

Correlation Coefficient

91324PEQ1  National CineMedia

Good diversification

The 3 months correlation between 91324PEQ1 and National is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding UNH 53 15 FEB 30 and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and 91324PEQ1 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 UNH 53 15 FEB 30 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 91324PEQ1 i.e., 91324PEQ1 and National CineMedia go up and down completely randomly.

Pair Corralation between 91324PEQ1 and National CineMedia

Assuming the 90 days trading horizon UNH 53 15 FEB 30 is expected to under-perform the National CineMedia. But the bond apears to be less risky and, when comparing its historical volatility, UNH 53 15 FEB 30 is 14.35 times less risky than National CineMedia. The bond trades about -0.01 of its potential returns per unit of risk. The National CineMedia is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  238.00  in National CineMedia on September 19, 2024 and sell it today you would earn a total of  459.00  from holding National CineMedia or generate 192.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.56%
Values	Daily Returns

UNH 53 15 FEB 30  vs.  National CineMedia

UNH 53 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNH 53 15 FEB 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 91324PEQ1 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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 91324PEQ1 and National CineMedia

The main advantage of trading using opposite 91324PEQ1 and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 91324PEQ1 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 UNH 53 15 FEB 30 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.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.