Correlation Between PennantPark Investment and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Cinemark Holdings 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 PennantPark Investment and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Cinemark Holdings, you can compare the effects of market volatilities on PennantPark Investment and Cinemark Holdings 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 PennantPark Investment with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Cinemark Holdings.
Diversification Opportunities for PennantPark Investment and Cinemark Holdings
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PennantPark and Cinemark is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and PennantPark Investment 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 PennantPark Investment are associated (or correlated) with Cinemark Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cinemark Holdings has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Cinemark Holdings go up and down completely randomly.
Pair Corralation between PennantPark Investment and Cinemark Holdings
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.89 times more return on investment than Cinemark Holdings. However, PennantPark Investment is 1.12 times less risky than Cinemark Holdings. It trades about 0.34 of its potential returns per unit of risk. Cinemark Holdings is currently generating about -0.29 per unit of risk. If you would invest 636.00 in PennantPark Investment on October 9, 2024 and sell it today you would earn a total of 65.00 from holding PennantPark Investment or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Cinemark Holdings
Performance |
| Timeline |
| PennantPark Investment |
| Cinemark Holdings |
PennantPark Investment and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Cinemark Holdings
The main advantage of trading using opposite PennantPark Investment and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Cinemark Holdings 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 Cinemark Holdings will offset losses from the drop in Cinemark Holdings' long position.| PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. NMI Holdings | PennantPark Investment vs. SIVERS SEMICONDUCTORS AB |
| Cinemark Holdings vs. Endeavour Mining PLC | Cinemark Holdings vs. Carnegie Clean Energy | Cinemark Holdings vs. MAG SILVER | Cinemark Holdings vs. ULTRA CLEAN HLDGS |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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