Correlation Between John Wiley and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both John Wiley 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 John Wiley and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Wiley Sons and Cinemark Holdings, you can compare the effects of market volatilities on John Wiley 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 John Wiley with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Wiley and Cinemark Holdings.
Diversification Opportunities for John Wiley and Cinemark Holdings
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Cinemark is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding John Wiley Sons and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and John Wiley 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 John Wiley Sons 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 John Wiley i.e., John Wiley and Cinemark Holdings go up and down completely randomly.
Pair Corralation between John Wiley and Cinemark Holdings
Given the investment horizon of 90 days John Wiley Sons is expected to generate 1.34 times more return on investment than Cinemark Holdings. However, John Wiley is 1.34 times more volatile than Cinemark Holdings. It trades about -0.11 of its potential returns per unit of risk. Cinemark Holdings is currently generating about -0.38 per unit of risk. If you would invest 4,230 in John Wiley Sons on November 2, 2024 and sell it today you would lose (111.00) from holding John Wiley Sons or give up 2.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
John Wiley Sons vs. Cinemark Holdings
Performance |
| Timeline |
| John Wiley Sons |
| Cinemark Holdings |
John Wiley and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Wiley and Cinemark Holdings
The main advantage of trading using opposite John Wiley and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Wiley 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.| John Wiley vs. Liberty Media | John Wiley vs. Atlanta Braves Holdings, | John Wiley vs. News Corp B | John Wiley vs. News Corp A |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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