Correlation Between National CineMedia and Acacia Pharma

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

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

Diversification Opportunities for National CineMedia and Acacia Pharma

0.0

Correlation Coefficient

National CineMedia  Acacia Pharma

Pay attention - limited upside

The 3 months correlation between National and Acacia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia and Acacia Pharma Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acacia Pharma Group 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 Acacia Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acacia Pharma Group has no effect on the direction of National CineMedia i.e., National CineMedia and Acacia Pharma go up and down completely randomly.

Pair Corralation between National CineMedia and Acacia Pharma

If you would invest  414.00  in National CineMedia on February 5, 2024 and sell it today you would earn a total of  43.00  from holding National CineMedia or generate 10.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.33%
Values	Daily Returns

National CineMedia  vs.  Acacia Pharma Group

National CineMedia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National CineMedia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady primary indicators, National CineMedia demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Acacia Pharma Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acacia Pharma Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Acacia Pharma is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with National CineMedia and Acacia Pharma

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

The idea behind National CineMedia and Acacia Pharma Group 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.