Correlation Between Roku and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both Roku 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 Roku and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and Cinemark Holdings, you can compare the effects of market volatilities on Roku 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 Roku with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and Cinemark Holdings.
Diversification Opportunities for Roku and Cinemark Holdings
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Roku and Cinemark is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Roku 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 Roku Inc 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 Roku i.e., Roku and Cinemark Holdings go up and down completely randomly.
Pair Corralation between Roku and Cinemark Holdings
Given the investment horizon of 90 days Roku Inc is expected to generate 3.43 times more return on investment than Cinemark Holdings. However, Roku is 3.43 times more volatile than Cinemark Holdings. It trades about 0.12 of its potential returns per unit of risk. Cinemark Holdings is currently generating about -0.43 per unit of risk. If you would invest 7,738 in Roku Inc on November 4, 2024 and sell it today you would earn a total of 538.00 from holding Roku Inc or generate 6.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roku Inc vs. Cinemark Holdings
Performance |
| Timeline |
| Roku Inc |
| Cinemark Holdings |
Roku and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and Cinemark Holdings
The main advantage of trading using opposite Roku and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku 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.| Roku vs. Walt Disney | Roku vs. AMC Entertainment Holdings | Roku vs. Paramount Global Class | Roku vs. Warner Bros Discovery |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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