Correlation Between Gold Fields and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Cinemark Holdings 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 Gold Fields and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields Ltd and Cinemark Holdings, you can compare the effects of market volatilities on Gold Fields and Cinemark Holdings 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 Gold Fields with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Cinemark Holdings.
Diversification Opportunities for Gold Fields and Cinemark Holdings
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gold and Cinemark is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Gold Fields 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 Gold Fields Ltd are associated (or correlated) with Cinemark Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cinemark Holdings has no effect on the direction of Gold Fields i.e., Gold Fields and Cinemark Holdings go up and down completely randomly.
Pair Corralation between Gold Fields and Cinemark Holdings
Considering the 90-day investment horizon Gold Fields is expected to generate 5.47 times less return on investment than Cinemark Holdings. In addition to that, Gold Fields is 1.5 times more volatile than Cinemark Holdings. It trades about 0.02 of its total potential returns per unit of risk. Cinemark Holdings is currently generating about 0.17 per unit of volatility. If you would invest 1,446 in Cinemark Holdings on August 24, 2024 and sell it today you would earn a total of 1,778 from holding Cinemark Holdings or generate 122.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Gold Fields Ltd vs. Cinemark Holdings
Performance |
Timeline |
Gold Fields |
Cinemark Holdings |
Gold Fields and Cinemark Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gold Fields and Cinemark Holdings
The main advantage of trading using opposite Gold Fields and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Cinemark Holdings 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 Cinemark Holdings will offset losses from the drop in Cinemark Holdings' long position.Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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