Correlation Between Cinemark Holdings and Chipotle Mexican
Can any of the company-specific risk be diversified away by investing in both Cinemark Holdings and Chipotle Mexican 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 Chipotle Mexican into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cinemark Holdings and Chipotle Mexican Grill, you can compare the effects of market volatilities on Cinemark Holdings and Chipotle Mexican 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 Chipotle Mexican. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinemark Holdings and Chipotle Mexican.
Diversification Opportunities for Cinemark Holdings and Chipotle Mexican
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cinemark and Chipotle is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cinemark Holdings and Chipotle Mexican Grill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chipotle Mexican Grill 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 Chipotle Mexican. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chipotle Mexican Grill has no effect on the direction of Cinemark Holdings i.e., Cinemark Holdings and Chipotle Mexican go up and down completely randomly.
Pair Corralation between Cinemark Holdings and Chipotle Mexican
Considering the 90-day investment horizon Cinemark Holdings is expected to generate 0.72 times more return on investment than Chipotle Mexican. However, Cinemark Holdings is 1.39 times less risky than Chipotle Mexican. It trades about 0.52 of its potential returns per unit of risk. Chipotle Mexican Grill is currently generating about -0.01 per unit of risk. If you would invest 2,867 in Cinemark Holdings on November 18, 2024 and sell it today you would earn a total of 389.00 from holding Cinemark Holdings or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cinemark Holdings vs. Chipotle Mexican Grill
Performance |
| Timeline |
| Cinemark Holdings |
| Chipotle Mexican Grill |
Cinemark Holdings and Chipotle Mexican Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinemark Holdings and Chipotle Mexican
The main advantage of trading using opposite Cinemark Holdings and Chipotle Mexican positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinemark Holdings position performs unexpectedly, Chipotle Mexican 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 Chipotle Mexican will offset losses from the drop in Chipotle Mexican's long position.| Cinemark Holdings vs. News Corp B | Cinemark Holdings vs. Marcus | Cinemark Holdings vs. Liberty Media | Cinemark Holdings vs. Warner Music Group |
| Chipotle Mexican vs. Starbucks | Chipotle Mexican vs. Dominos Pizza Common | Chipotle Mexican vs. Yum Brands | Chipotle Mexican vs. The Wendys Co |
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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