Correlation Between MGIC INVESTMENT and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT 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 MGIC INVESTMENT and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and Cinemark Holdings, you can compare the effects of market volatilities on MGIC INVESTMENT 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 MGIC INVESTMENT with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and Cinemark Holdings.
Diversification Opportunities for MGIC INVESTMENT and Cinemark Holdings
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MGIC and Cinemark is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and MGIC INVESTMENT 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 MGIC INVESTMENT 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 MGIC INVESTMENT i.e., MGIC INVESTMENT and Cinemark Holdings go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and Cinemark Holdings
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.67 times more return on investment than Cinemark Holdings. However, MGIC INVESTMENT is 1.49 times less risky than Cinemark Holdings. It trades about -0.25 of its potential returns per unit of risk. Cinemark Holdings is currently generating about -0.3 per unit of risk. If you would invest 2,440 in MGIC INVESTMENT on October 7, 2024 and sell it today you would lose (140.00) from holding MGIC INVESTMENT or give up 5.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC INVESTMENT vs. Cinemark Holdings
Performance |
| Timeline |
| MGIC INVESTMENT |
| Cinemark Holdings |
MGIC INVESTMENT and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and Cinemark Holdings
The main advantage of trading using opposite MGIC INVESTMENT and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT 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.| MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc |
| Cinemark Holdings vs. PennantPark Investment | Cinemark Holdings vs. EMBARK EDUCATION LTD | Cinemark Holdings vs. Apollo Investment Corp | Cinemark Holdings vs. ECHO INVESTMENT ZY |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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