Correlation Between Cinemark Holdings and Kuke Music
Can any of the company-specific risk be diversified away by investing in both Cinemark Holdings and Kuke Music 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 Kuke Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cinemark Holdings and Kuke Music Holding, you can compare the effects of market volatilities on Cinemark Holdings and Kuke Music 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 Kuke Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinemark Holdings and Kuke Music.
Diversification Opportunities for Cinemark Holdings and Kuke Music
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cinemark and Kuke is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cinemark Holdings and Kuke Music Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuke Music Holding 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 Kuke Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuke Music Holding has no effect on the direction of Cinemark Holdings i.e., Cinemark Holdings and Kuke Music go up and down completely randomly.
Pair Corralation between Cinemark Holdings and Kuke Music
Considering the 90-day investment horizon Cinemark Holdings is expected to generate 0.13 times more return on investment than Kuke Music. However, Cinemark Holdings is 7.58 times less risky than Kuke Music. It trades about 0.14 of its potential returns per unit of risk. Kuke Music Holding is currently generating about -0.07 per unit of risk. If you would invest 2,780 in Cinemark Holdings on August 23, 2024 and sell it today you would earn a total of 445.00 from holding Cinemark Holdings or generate 16.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cinemark Holdings vs. Kuke Music Holding
Performance |
| Timeline |
| Cinemark Holdings |
| Kuke Music Holding |
Cinemark Holdings and Kuke Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinemark Holdings and Kuke Music
The main advantage of trading using opposite Cinemark Holdings and Kuke Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinemark Holdings position performs unexpectedly, Kuke Music 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 Kuke Music will offset losses from the drop in Kuke Music's long position.| Cinemark Holdings vs. News Corp B | Cinemark Holdings vs. Marcus | Cinemark Holdings vs. Liberty Media | Cinemark Holdings vs. Warner Music Group |
| Kuke Music vs. Cinemark Holdings | Kuke Music vs. News Corp B | Kuke Music vs. Marcus | Kuke Music vs. Liberty Media |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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