Correlation Between Cinemark Holdings and IHeartMedia
Can any of the company-specific risk be diversified away by investing in both Cinemark Holdings and IHeartMedia 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 IHeartMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cinemark Holdings and iHeartMedia Class A, you can compare the effects of market volatilities on Cinemark Holdings and IHeartMedia 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 IHeartMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinemark Holdings and IHeartMedia.
Diversification Opportunities for Cinemark Holdings and IHeartMedia
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cinemark and IHeartMedia is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cinemark Holdings and iHeartMedia Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iHeartMedia Class 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 IHeartMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iHeartMedia Class has no effect on the direction of Cinemark Holdings i.e., Cinemark Holdings and IHeartMedia go up and down completely randomly.
Pair Corralation between Cinemark Holdings and IHeartMedia
Considering the 90-day investment horizon Cinemark Holdings is expected to generate 0.31 times more return on investment than IHeartMedia. However, Cinemark Holdings is 3.23 times less risky than IHeartMedia. It trades about 0.17 of its potential returns per unit of risk. iHeartMedia Class A is currently generating about 0.02 per unit of risk. If you would invest 1,461 in Cinemark Holdings on August 27, 2024 and sell it today you would earn a total of 1,802 from holding Cinemark Holdings or generate 123.34% 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. iHeartMedia Class A
Performance |
| Timeline |
| Cinemark Holdings |
| iHeartMedia Class |
Cinemark Holdings and IHeartMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinemark Holdings and IHeartMedia
The main advantage of trading using opposite Cinemark Holdings and IHeartMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinemark Holdings position performs unexpectedly, IHeartMedia 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 IHeartMedia will offset losses from the drop in IHeartMedia's long position.| Cinemark Holdings vs. News Corp B | Cinemark Holdings vs. Marcus | Cinemark Holdings vs. Liberty Media | Cinemark Holdings vs. Warner Music Group |
| IHeartMedia vs. Walt Disney | IHeartMedia vs. Roku Inc | IHeartMedia vs. Netflix | IHeartMedia 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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