Correlation Between Rai Way and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both Rai Way 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 Rai Way and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rai Way SpA and Cinemark Holdings, you can compare the effects of market volatilities on Rai Way 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 Rai Way with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rai Way and Cinemark Holdings.
Diversification Opportunities for Rai Way and Cinemark Holdings
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rai and Cinemark is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Rai Way SpA and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Rai Way 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 Rai Way SpA 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 Rai Way i.e., Rai Way and Cinemark Holdings go up and down completely randomly.
Pair Corralation between Rai Way and Cinemark Holdings
Assuming the 90 days horizon Rai Way SpA is expected to under-perform the Cinemark Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Rai Way SpA is 1.31 times less risky than Cinemark Holdings. The stock trades about -0.1 of its potential returns per unit of risk. The Cinemark Holdings is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 2,729 in Cinemark Holdings on August 31, 2024 and sell it today you would earn a total of 497.00 from holding Cinemark Holdings or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Rai Way SpA vs. Cinemark Holdings
Performance |
| Timeline |
| Rai Way SpA |
| Cinemark Holdings |
Rai Way and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rai Way and Cinemark Holdings
The main advantage of trading using opposite Rai Way and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rai Way 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.| Rai Way vs. JJ SNACK FOODS | Rai Way vs. THAI BEVERAGE | Rai Way vs. Tyson Foods | Rai Way vs. Suntory Beverage Food |
| Cinemark Holdings vs. Live Nation Entertainment | Cinemark Holdings vs. Fuji Media Holdings | Cinemark Holdings vs. Rai Way SpA | Cinemark Holdings vs. Superior Plus 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 the CEOs Directory module to screen CEOs from public companies around the world.
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