Correlation Between Microsoft and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both Microsoft 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 Microsoft and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Cinemark Holdings, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Cinemark Holdings.
Diversification Opportunities for Microsoft and Cinemark Holdings
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Cinemark is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Microsoft 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 Microsoft 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 Microsoft i.e., Microsoft and Cinemark Holdings go up and down completely randomly.
Pair Corralation between Microsoft and Cinemark Holdings
Given the investment horizon of 90 days Microsoft is expected to generate 6.57 times less return on investment than Cinemark Holdings. But when comparing it to its historical volatility, Microsoft is 1.31 times less risky than Cinemark Holdings. It trades about 0.05 of its potential returns per unit of risk. Cinemark Holdings is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,462 in Cinemark Holdings on September 2, 2024 and sell it today you would earn a total of 756.00 from holding Cinemark Holdings or generate 30.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.97% |
| Values | Daily Returns |
Microsoft vs. Cinemark Holdings
Performance |
| Timeline |
| Microsoft |
| Cinemark Holdings |
Microsoft and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Cinemark Holdings
The main advantage of trading using opposite Microsoft and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |