Correlation Between Paramount Global and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both Paramount Global 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 Paramount Global and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paramount Global Class and Cinemark Holdings, you can compare the effects of market volatilities on Paramount Global 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 Paramount Global with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paramount Global and Cinemark Holdings.
Diversification Opportunities for Paramount Global and Cinemark Holdings
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Paramount and Cinemark is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Paramount Global Class and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Paramount Global 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 Paramount Global Class 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 Paramount Global i.e., Paramount Global and Cinemark Holdings go up and down completely randomly.
Pair Corralation between Paramount Global and Cinemark Holdings
Given the investment horizon of 90 days Paramount Global Class is expected to generate 0.81 times more return on investment than Cinemark Holdings. However, Paramount Global Class is 1.24 times less risky than Cinemark Holdings. It trades about 0.01 of its potential returns per unit of risk. Cinemark Holdings is currently generating about -0.12 per unit of risk. If you would invest 1,162 in Paramount Global Class on December 24, 2024 and sell it today you would earn a total of 2.00 from holding Paramount Global Class or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paramount Global Class vs. Cinemark Holdings
Performance |
| Timeline |
| Paramount Global Class |
| Cinemark Holdings |
Paramount Global and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paramount Global and Cinemark Holdings
The main advantage of trading using opposite Paramount Global and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paramount Global 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.| Paramount Global vs. Walt Disney | Paramount Global vs. Roku Inc | Paramount Global vs. Netflix | Paramount Global vs. AMC Entertainment Holdings |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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