Correlation Between Lifeway Foods and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both Lifeway Foods 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 Lifeway Foods and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifeway Foods and Cinemark Holdings, you can compare the effects of market volatilities on Lifeway Foods 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 Lifeway Foods with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifeway Foods and Cinemark Holdings.
Diversification Opportunities for Lifeway Foods and Cinemark Holdings
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lifeway and Cinemark is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lifeway Foods and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Lifeway Foods 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 Lifeway Foods 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 Lifeway Foods i.e., Lifeway Foods and Cinemark Holdings go up and down completely randomly.
Pair Corralation between Lifeway Foods and Cinemark Holdings
Assuming the 90 days horizon Lifeway Foods is expected to under-perform the Cinemark Holdings. In addition to that, Lifeway Foods is 2.88 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 0.41 per unit of volatility. If you would invest 2,724 in Cinemark Holdings on September 2, 2024 and sell it today you would earn a total of 494.00 from holding Cinemark Holdings or generate 18.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifeway Foods vs. Cinemark Holdings
Performance |
| Timeline |
| Lifeway Foods |
| Cinemark Holdings |
Lifeway Foods and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifeway Foods and Cinemark Holdings
The main advantage of trading using opposite Lifeway Foods and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifeway Foods 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.| Lifeway Foods vs. Danone SA | Lifeway Foods vs. Superior Plus Corp | Lifeway Foods vs. NMI Holdings | Lifeway Foods vs. Origin Agritech |
| Cinemark Holdings vs. Lifeway Foods | Cinemark Holdings vs. National Beverage Corp | Cinemark Holdings vs. Tyson Foods | Cinemark Holdings vs. INDOFOOD AGRI RES |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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