Correlation Between Warner Bros and Cinemark Holdings

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Warner Bros 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 Warner Bros and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warner Bros Discovery and Cinemark Holdings, you can compare the effects of market volatilities on Warner Bros 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 Warner Bros with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warner Bros and Cinemark Holdings.

Diversification Opportunities for Warner Bros and Cinemark Holdings

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Warner and Cinemark is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Warner Bros Discovery and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Warner Bros 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 Warner Bros Discovery 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 Warner Bros i.e., Warner Bros and Cinemark Holdings go up and down completely randomly.

Pair Corralation between Warner Bros and Cinemark Holdings

Considering the 90-day investment horizon Warner Bros Discovery is expected to under-perform the Cinemark Holdings. In addition to that, Warner Bros is 2.29 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 -0.26 per unit of volatility. If you would invest  3,071  in Cinemark Holdings on October 25, 2024 and sell it today you would lose (140.00) from holding Cinemark Holdings or give up 4.56% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy94.74%
ValuesDaily Returns

Warner Bros Discovery  vs.  Cinemark Holdings

 Performance 
       Timeline  
Warner Bros Discovery 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Warner Bros Discovery are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental drivers, Warner Bros exhibited solid returns over the last few months and may actually be approaching a breakup point.
Cinemark Holdings 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Cinemark Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Cinemark Holdings is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Warner Bros and Cinemark Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Warner Bros and Cinemark Holdings

The main advantage of trading using opposite Warner Bros and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warner Bros 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.
The idea behind Warner Bros Discovery and Cinemark Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

Other Complementary Tools

Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Commodity Directory
Find actively traded commodities issued by global exchanges
CEOs Directory
Screen CEOs from public companies around the world