Correlation Between Chicken Soup and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Chicken Soup 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 Chicken Soup and National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicken Soup for and National CineMedia, you can compare the effects of market volatilities on Chicken Soup 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 Chicken Soup with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicken Soup and National CineMedia.
Diversification Opportunities for Chicken Soup and National CineMedia
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chicken and National is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Chicken Soup for and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Chicken Soup 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 Chicken Soup for 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 Chicken Soup i.e., Chicken Soup and National CineMedia go up and down completely randomly.
Pair Corralation between Chicken Soup and National CineMedia
Given the investment horizon of 90 days Chicken Soup for is expected to under-perform the National CineMedia. In addition to that, Chicken Soup is 1.25 times more volatile than National CineMedia. It trades about -0.02 of its total potential returns per unit of risk. National CineMedia is currently generating about 0.01 per unit of volatility. If you would invest 1,108 in National CineMedia on February 13, 2024 and sell it today you would lose (650.50) from holding National CineMedia or give up 58.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Chicken Soup for vs. National CineMedia
Performance |
Timeline |
Chicken Soup for |
National CineMedia |
Chicken Soup and National CineMedia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chicken Soup and National CineMedia
The main advantage of trading using opposite Chicken Soup and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicken Soup 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.Chicken Soup vs. Roku Inc | Chicken Soup vs. Paramount Global Class | Chicken Soup vs. Warner Bros Discovery | Chicken Soup vs. Paramount Global Class |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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