Correlation Between AMC Networks and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both AMC Networks 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 AMC Networks and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMC Networks and Cinemark Holdings, you can compare the effects of market volatilities on AMC Networks 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 AMC Networks with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Networks and Cinemark Holdings.
Diversification Opportunities for AMC Networks and Cinemark Holdings
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between AMC and Cinemark is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding AMC Networks and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and AMC Networks 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 AMC Networks 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 AMC Networks i.e., AMC Networks and Cinemark Holdings go up and down completely randomly.
Pair Corralation between AMC Networks and Cinemark Holdings
Given the investment horizon of 90 days AMC Networks is expected to under-perform the Cinemark Holdings. In addition to that, AMC Networks is 2.16 times more volatile than Cinemark Holdings. It trades about -0.02 of its total potential returns per unit of risk. Cinemark Holdings is currently generating about 0.17 per unit of volatility. If you would invest 2,770 in Cinemark Holdings on August 28, 2024 and sell it today you would earn a total of 555.00 from holding Cinemark Holdings or generate 20.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Networks vs. Cinemark Holdings
Performance |
| Timeline |
| AMC Networks |
| Cinemark Holdings |
AMC Networks and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Networks and Cinemark Holdings
The main advantage of trading using opposite AMC Networks and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Networks 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.| AMC Networks vs. Walt Disney | AMC Networks vs. Roku Inc | AMC Networks vs. Netflix | AMC Networks vs. AMC Entertainment Holdings |
| Cinemark Holdings vs. News Corp B | Cinemark Holdings vs. Marcus | Cinemark Holdings vs. Liberty Media | Cinemark Holdings vs. Warner Music Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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