Correlation Between Cinemark Holdings and MGO Global
Can any of the company-specific risk be diversified away by investing in both Cinemark Holdings and MGO Global 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 MGO Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cinemark Holdings and MGO Global Common, you can compare the effects of market volatilities on Cinemark Holdings and MGO Global 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 MGO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinemark Holdings and MGO Global.
Diversification Opportunities for Cinemark Holdings and MGO Global
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cinemark and MGO is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cinemark Holdings and MGO Global Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGO Global Common 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 MGO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGO Global Common has no effect on the direction of Cinemark Holdings i.e., Cinemark Holdings and MGO Global go up and down completely randomly.
Pair Corralation between Cinemark Holdings and MGO Global
Considering the 90-day investment horizon Cinemark Holdings is expected to generate 8.1 times less return on investment than MGO Global. But when comparing it to its historical volatility, Cinemark Holdings is 21.94 times less risky than MGO Global. It trades about 0.13 of its potential returns per unit of risk. MGO Global Common is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.05 in MGO Global Common on August 28, 2024 and sell it today you would earn a total of 234.95 from holding MGO Global Common or generate 469900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.95% |
| Values | Daily Returns |
Cinemark Holdings vs. MGO Global Common
Performance |
| Timeline |
| Cinemark Holdings |
| MGO Global Common |
Cinemark Holdings and MGO Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinemark Holdings and MGO Global
The main advantage of trading using opposite Cinemark Holdings and MGO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinemark Holdings position performs unexpectedly, MGO Global 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 MGO Global will offset losses from the drop in MGO Global's long position.| Cinemark Holdings vs. ADTRAN Inc | Cinemark Holdings vs. Belden Inc | Cinemark Holdings vs. ADC Therapeutics SA | Cinemark Holdings vs. Comtech Telecommunications Corp |
| MGO Global vs. ADTRAN Inc | MGO Global vs. Belden Inc | MGO Global vs. ADC Therapeutics SA | MGO Global vs. Comtech Telecommunications Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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