Correlation Between Baker Hughes and National Cinemedia

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Baker Hughes 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 Baker Hughes and National Cinemedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baker Hughes A and National Cinemedia, you can compare the effects of market volatilities on Baker Hughes 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 Baker Hughes with a short position of National Cinemedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Hughes and National Cinemedia.

Diversification Opportunities for Baker Hughes and National Cinemedia

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Baker and National is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Baker Hughes A and National Cinemedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Cinemedia and Baker Hughes 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 Baker Hughes A 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 Baker Hughes i.e., Baker Hughes and National Cinemedia go up and down completely randomly.

Pair Corralation between Baker Hughes and National Cinemedia

Considering the 90-day investment horizon Baker Hughes A is expected to generate 0.68 times more return on investment than National Cinemedia. However, Baker Hughes A is 1.47 times less risky than National Cinemedia. It trades about -0.33 of its potential returns per unit of risk. National Cinemedia is currently generating about -0.47 per unit of risk. If you would invest  2,623  in Baker Hughes A on June 30, 2022 and sell it today you would lose (547.00)  from holding Baker Hughes A or give up 20.85% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Baker Hughes A  vs.  National Cinemedia

 Performance (%) 
       Timeline  
Baker Hughes A 
Baker Performance
0 of 100
Over the last 90 days Baker Hughes A has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in October 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Baker Price Channel

National Cinemedia 
National Performance
0 of 100
Over the last 90 days National Cinemedia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

National Price Channel

Baker Hughes and National Cinemedia Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Baker Hughes and National Cinemedia

The main advantage of trading using opposite Baker Hughes and National Cinemedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Hughes 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.
Baker Hughes vs. Kibush Capital Corp
The idea behind Baker Hughes A 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.
National Cinemedia vs. Clearwater Paper Corp
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go