Correlation Between Sinclair Broadcast and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both Sinclair Broadcast 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 Sinclair Broadcast and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinclair Broadcast Group and Cinemark Holdings, you can compare the effects of market volatilities on Sinclair Broadcast 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 Sinclair Broadcast with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinclair Broadcast and Cinemark Holdings.
Diversification Opportunities for Sinclair Broadcast and Cinemark Holdings
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sinclair and Cinemark is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Sinclair Broadcast 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 Sinclair Broadcast Group 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 Sinclair Broadcast i.e., Sinclair Broadcast and Cinemark Holdings go up and down completely randomly.
Pair Corralation between Sinclair Broadcast and Cinemark Holdings
Given the investment horizon of 90 days Sinclair Broadcast is expected to generate 1.55 times less return on investment than Cinemark Holdings. In addition to that, Sinclair Broadcast is 1.55 times more volatile than Cinemark Holdings. It trades about 0.12 of its total potential returns per unit of risk. Cinemark Holdings is currently generating about 0.28 per unit of volatility. If you would invest 1,699 in Cinemark Holdings on August 28, 2024 and sell it today you would earn a total of 1,626 from holding Cinemark Holdings or generate 95.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinclair Broadcast Group vs. Cinemark Holdings
Performance |
| Timeline |
| Sinclair Broadcast |
| Cinemark Holdings |
Sinclair Broadcast and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinclair Broadcast and Cinemark Holdings
The main advantage of trading using opposite Sinclair Broadcast and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinclair Broadcast 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.| Sinclair Broadcast vs. News Corp A | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. AMC Networks |
| Cinemark Holdings vs. ADTRAN Inc | Cinemark Holdings vs. Belden Inc | Cinemark Holdings vs. ADC Therapeutics SA | Cinemark Holdings vs. Comtech Telecommunications Corp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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