Correlation Between Cinemark Holdings and Software Acquisition
Can any of the company-specific risk be diversified away by investing in both Cinemark Holdings and Software Acquisition 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 Software Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cinemark Holdings and Software Acquisition Group, you can compare the effects of market volatilities on Cinemark Holdings and Software Acquisition 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 Software Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinemark Holdings and Software Acquisition.
Diversification Opportunities for Cinemark Holdings and Software Acquisition
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cinemark and Software is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cinemark Holdings and Software Acquisition Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Acquisition 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 Software Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Acquisition has no effect on the direction of Cinemark Holdings i.e., Cinemark Holdings and Software Acquisition go up and down completely randomly.
Pair Corralation between Cinemark Holdings and Software Acquisition
Considering the 90-day investment horizon Cinemark Holdings is expected to generate 43.38 times less return on investment than Software Acquisition. But when comparing it to its historical volatility, Cinemark Holdings is 51.64 times less risky than Software Acquisition. It trades about 0.16 of its potential returns per unit of risk. Software Acquisition Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Software Acquisition Group on September 14, 2024 and sell it today you would earn a total of 1.26 from holding Software Acquisition Group or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 41.77% |
| Values | Daily Returns |
Cinemark Holdings vs. Software Acquisition Group
Performance |
| Timeline |
| Cinemark Holdings |
| Software Acquisition |
Cinemark Holdings and Software Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinemark Holdings and Software Acquisition
The main advantage of trading using opposite Cinemark Holdings and Software Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinemark Holdings position performs unexpectedly, Software Acquisition 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 Software Acquisition will offset losses from the drop in Software Acquisition's long position.| Cinemark Holdings vs. News Corp B | Cinemark Holdings vs. Marcus | Cinemark Holdings vs. Liberty Media | Cinemark Holdings vs. Warner Music Group |
| Software Acquisition vs. Asbury Automotive Group | Software Acquisition vs. Coupang LLC | Software Acquisition vs. Meiwu Technology Co | Software Acquisition vs. Inter Parfums |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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