Correlation Between Cinemark Holdings and Madison Square
Can any of the company-specific risk be diversified away by investing in both Cinemark Holdings and Madison Square 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 Madison Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cinemark Holdings and Madison Square Garden, you can compare the effects of market volatilities on Cinemark Holdings and Madison Square 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 Madison Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinemark Holdings and Madison Square.
Diversification Opportunities for Cinemark Holdings and Madison Square
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cinemark and Madison is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Cinemark Holdings and Madison Square Garden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Square Garden 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 Madison Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Square Garden has no effect on the direction of Cinemark Holdings i.e., Cinemark Holdings and Madison Square go up and down completely randomly.
Pair Corralation between Cinemark Holdings and Madison Square
Considering the 90-day investment horizon Cinemark Holdings is expected to generate 1.55 times more return on investment than Madison Square. However, Cinemark Holdings is 1.55 times more volatile than Madison Square Garden. It trades about 0.31 of its potential returns per unit of risk. Madison Square Garden is currently generating about 0.16 per unit of risk. If you would invest 2,869 in Cinemark Holdings on August 26, 2024 and sell it today you would earn a total of 394.00 from holding Cinemark Holdings or generate 13.73% 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. Madison Square Garden
Performance |
| Timeline |
| Cinemark Holdings |
| Madison Square Garden |
Cinemark Holdings and Madison Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinemark Holdings and Madison Square
The main advantage of trading using opposite Cinemark Holdings and Madison Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinemark Holdings position performs unexpectedly, Madison Square 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 Madison Square will offset losses from the drop in Madison Square's long position.| Cinemark Holdings vs. News Corp B | Cinemark Holdings vs. Marcus | Cinemark Holdings vs. Liberty Media | Cinemark Holdings vs. Warner Music Group |
| Madison Square vs. Atlanta Braves Holdings, | Madison Square vs. Liberty Media | Madison Square vs. Liberty Media | Madison Square vs. Atlanta Braves 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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