Correlation Between Kuke Music and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both Kuke Music 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 Kuke Music and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuke Music Holding and Cinemark Holdings, you can compare the effects of market volatilities on Kuke Music 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 Kuke Music with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuke Music and Cinemark Holdings.
Diversification Opportunities for Kuke Music and Cinemark Holdings
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kuke and Cinemark is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kuke Music Holding and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Kuke Music 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 Kuke Music Holding 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 Kuke Music i.e., Kuke Music and Cinemark Holdings go up and down completely randomly.
Pair Corralation between Kuke Music and Cinemark Holdings
Given the investment horizon of 90 days Kuke Music Holding is expected to under-perform the Cinemark Holdings. In addition to that, Kuke Music is 5.19 times more volatile than Cinemark Holdings. It trades about -0.04 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 1,741 in Cinemark Holdings on August 27, 2024 and sell it today you would earn a total of 1,522 from holding Cinemark Holdings or generate 87.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuke Music Holding vs. Cinemark Holdings
Performance |
| Timeline |
| Kuke Music Holding |
| Cinemark Holdings |
Kuke Music and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuke Music and Cinemark Holdings
The main advantage of trading using opposite Kuke Music and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuke Music 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.| Kuke Music vs. Cinemark Holdings | Kuke Music vs. News Corp B | Kuke Music vs. Marcus | Kuke Music vs. Liberty Media |
| Cinemark Holdings vs. News Corp B | Cinemark Holdings vs. Marcus | Cinemark Holdings vs. Liberty Media | Cinemark Holdings vs. Warner Music Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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