Correlation Between EMBARK EDUCATION and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both EMBARK EDUCATION 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 EMBARK EDUCATION and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMBARK EDUCATION LTD and Cinemark Holdings, you can compare the effects of market volatilities on EMBARK EDUCATION 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 EMBARK EDUCATION with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBARK EDUCATION and Cinemark Holdings.
Diversification Opportunities for EMBARK EDUCATION and Cinemark Holdings
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMBARK and Cinemark is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding EMBARK EDUCATION LTD and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and EMBARK EDUCATION 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 EMBARK EDUCATION LTD 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 EMBARK EDUCATION i.e., EMBARK EDUCATION and Cinemark Holdings go up and down completely randomly.
Pair Corralation between EMBARK EDUCATION and Cinemark Holdings
If you would invest 31.00 in EMBARK EDUCATION LTD on October 9, 2024 and sell it today you would earn a total of 0.00 from holding EMBARK EDUCATION LTD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.75% |
| Values | Daily Returns |
EMBARK EDUCATION LTD vs. Cinemark Holdings
Performance |
| Timeline |
| EMBARK EDUCATION LTD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Cinemark Holdings |
EMBARK EDUCATION and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMBARK EDUCATION and Cinemark Holdings
The main advantage of trading using opposite EMBARK EDUCATION and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMBARK EDUCATION 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.| EMBARK EDUCATION vs. IDP EDUCATION LTD | EMBARK EDUCATION vs. Strategic Education | EMBARK EDUCATION vs. Laureate Education | EMBARK EDUCATION vs. Superior Plus Corp |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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