Correlation Between Cinemark Holdings and AMC Networks
Can any of the company-specific risk be diversified away by investing in both Cinemark Holdings and AMC Networks 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 Cinemark Holdings and AMC Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cinemark Holdings and AMC Networks, you can compare the effects of market volatilities on Cinemark Holdings and AMC Networks 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 Cinemark Holdings with a short position of AMC Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinemark Holdings and AMC Networks.
Diversification Opportunities for Cinemark Holdings and AMC Networks
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cinemark and AMC is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cinemark Holdings and AMC Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Networks and Cinemark Holdings 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 Cinemark Holdings are associated (or correlated) with AMC Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMC Networks has no effect on the direction of Cinemark Holdings i.e., Cinemark Holdings and AMC Networks go up and down completely randomly.
Pair Corralation between Cinemark Holdings and AMC Networks
Considering the 90-day investment horizon Cinemark Holdings is expected to generate 0.46 times more return on investment than AMC Networks. However, Cinemark Holdings is 2.16 times less risky than AMC Networks. It trades about 0.17 of its potential returns per unit of risk. AMC Networks is currently generating about -0.02 per unit of risk. 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 |
Cinemark Holdings vs. AMC Networks
Performance |
| Timeline |
| Cinemark Holdings |
| AMC Networks |
Cinemark Holdings and AMC Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinemark Holdings and AMC Networks
The main advantage of trading using opposite Cinemark Holdings and AMC Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinemark Holdings position performs unexpectedly, AMC Networks 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 AMC Networks will offset losses from the drop in AMC Networks' long position.| Cinemark Holdings vs. News Corp B | Cinemark Holdings vs. Marcus | Cinemark Holdings vs. Liberty Media | Cinemark Holdings vs. Warner Music Group |
| AMC Networks vs. Walt Disney | AMC Networks vs. Roku Inc | AMC Networks vs. Netflix | AMC Networks vs. AMC Entertainment Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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