Correlation Between Cinemark Holdings and News Corp
Can any of the company-specific risk be diversified away by investing in both Cinemark Holdings and News Corp 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 News Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cinemark Holdings and News Corp B, you can compare the effects of market volatilities on Cinemark Holdings and News Corp 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 News Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinemark Holdings and News Corp.
Diversification Opportunities for Cinemark Holdings and News Corp
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cinemark and News is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cinemark Holdings and News Corp B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News Corp B 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 News Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News Corp B has no effect on the direction of Cinemark Holdings i.e., Cinemark Holdings and News Corp go up and down completely randomly.
Pair Corralation between Cinemark Holdings and News Corp
Considering the 90-day investment horizon Cinemark Holdings is expected to generate 1.54 times more return on investment than News Corp. However, Cinemark Holdings is 1.54 times more volatile than News Corp B. It trades about 0.17 of its potential returns per unit of risk. News Corp B is currently generating about 0.11 per unit of risk. If you would invest 1,425 in Cinemark Holdings on August 26, 2024 and sell it today you would earn a total of 1,838 from holding Cinemark Holdings or generate 128.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cinemark Holdings vs. News Corp B
Performance |
| Timeline |
| Cinemark Holdings |
| News Corp B |
Cinemark Holdings and News Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinemark Holdings and News Corp
The main advantage of trading using opposite Cinemark Holdings and News Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinemark Holdings position performs unexpectedly, News Corp 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 News Corp will offset losses from the drop in News Corp's long position.| Cinemark Holdings vs. News Corp B | Cinemark Holdings vs. Marcus | Cinemark Holdings vs. Liberty Media | Cinemark Holdings vs. Warner Music Group |
| News Corp vs. Fox Corp Class | News Corp vs. Liberty Media | News Corp vs. Marcus | News Corp vs. Madison Square Garden |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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