Correlation Between Match and National CineMedia

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

By analyzing existing cross correlation between Match Group 5 and National CineMedia, you can compare the effects of market volatilities on Match 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 Match with a short position of National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Match and National CineMedia.

Diversification Opportunities for Match and National CineMedia

-0.18

Correlation Coefficient

Match  National CineMedia

Good diversification

The 3 months correlation between Match and National is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Match Group 5 and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia and Match 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 Match Group 5 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 Match i.e., Match and National CineMedia go up and down completely randomly.

Pair Corralation between Match and National CineMedia

Assuming the 90 days trading horizon Match Group 5 is expected to under-perform the National CineMedia. But the bond apears to be less risky and, when comparing its historical volatility, Match Group 5 is 6.38 times less risky than National CineMedia. The bond trades about -0.19 of its potential returns per unit of risk. The National CineMedia is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  685.00  in National CineMedia on September 22, 2024 and sell it today you would lose (13.00) from holding National CineMedia or give up 1.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.06%
Values	Daily Returns

Match Group 5  vs.  National CineMedia

Match Group 5

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Match Group 5 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Match is not utilizing all of its potentials. The current 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 latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Match and National CineMedia

The main advantage of trading using opposite Match and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Match 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 Match Group 5 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.