Correlation Between ÜSTRA Hannoversche and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both ÜSTRA Hannoversche 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 ÜSTRA Hannoversche and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRA Hannoversche Verkehrsbetriebe and Cinemark Holdings, you can compare the effects of market volatilities on ÜSTRA Hannoversche 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 ÜSTRA Hannoversche with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ÜSTRA Hannoversche and Cinemark Holdings.
Diversification Opportunities for ÜSTRA Hannoversche and Cinemark Holdings
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ÜSTRA and Cinemark is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding STRA Hannoversche Verkehrsbetr and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and ÜSTRA Hannoversche 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 STRA Hannoversche Verkehrsbetriebe 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 ÜSTRA Hannoversche i.e., ÜSTRA Hannoversche and Cinemark Holdings go up and down completely randomly.
Pair Corralation between ÜSTRA Hannoversche and Cinemark Holdings
Assuming the 90 days horizon ÜSTRA Hannoversche is expected to generate 2.81 times less return on investment than Cinemark Holdings. In addition to that, ÜSTRA Hannoversche is 1.72 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 0.09 per unit of volatility. If you would invest 1,136 in Cinemark Holdings on September 2, 2024 and sell it today you would earn a total of 2,082 from holding Cinemark Holdings or generate 183.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
STRA Hannoversche Verkehrsbetr vs. Cinemark Holdings
Performance |
Timeline |
ÜSTRA Hannoversche |
Cinemark Holdings |
ÜSTRA Hannoversche and Cinemark Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ÜSTRA Hannoversche and Cinemark Holdings
The main advantage of trading using opposite ÜSTRA Hannoversche and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ÜSTRA Hannoversche 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.ÜSTRA Hannoversche vs. SCANDMEDICAL SOLDK 040 | ÜSTRA Hannoversche vs. MGIC INVESTMENT | ÜSTRA Hannoversche vs. HK Electric Investments | ÜSTRA Hannoversche vs. MEDICAL FACILITIES NEW |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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