Correlation Between Visa and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Cinemark Holdings, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Cinemark Holdings.
Diversification Opportunities for Visa and Cinemark Holdings
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Visa and Cinemark is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Visa 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 Visa Class A 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 Visa i.e., Visa and Cinemark Holdings go up and down completely randomly.
Pair Corralation between Visa and Cinemark Holdings
Taking into account the 90-day investment horizon Visa is expected to generate 2.06 times less return on investment than Cinemark Holdings. But when comparing it to its historical volatility, Visa Class A is 1.33 times less risky than Cinemark Holdings. It trades about 0.16 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 Together |
| Strength | Very Strong |
| Accuracy | 96.97% |
| Values | Daily Returns |
Visa Class A vs. Cinemark Holdings
Performance |
| Timeline |
| Visa Class A |
| Cinemark Holdings |
Visa and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Cinemark Holdings
The main advantage of trading using opposite Visa and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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