Correlation Between Cinemark Holdings and Electronic Arts

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

Diversification Opportunities for Cinemark Holdings and Electronic Arts

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Cinemark and Electronic is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cinemark Holdings and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts and Cinemark Holdings 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 Cinemark Holdings are associated (or correlated) with Electronic Arts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Arts has no effect on the direction of Cinemark Holdings i.e., Cinemark Holdings and Electronic Arts go up and down completely randomly.

Pair Corralation between Cinemark Holdings and Electronic Arts

Considering the 90-day investment horizon Cinemark Holdings is expected to generate 2.52 times more return on investment than Electronic Arts. However, Cinemark Holdings is 2.52 times more volatile than Electronic Arts. It trades about 0.17 of its potential returns per unit of risk. Electronic Arts is currently generating about -0.31 per unit of risk. If you would invest  1,681  in Cinemark Holdings on December 29, 2023 and sell it today you would earn a total of  126.00  from holding Cinemark Holdings or generate 7.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cinemark Holdings  vs.  Electronic Arts

 Performance 
       Timeline  
Cinemark Holdings 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Cinemark Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Cinemark Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.
Electronic Arts 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Electronic Arts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Electronic Arts is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Cinemark Holdings and Electronic Arts Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cinemark Holdings and Electronic Arts

The main advantage of trading using opposite Cinemark Holdings and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinemark Holdings position performs unexpectedly, Electronic Arts 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 Electronic Arts will offset losses from the drop in Electronic Arts' long position.
The idea behind Cinemark Holdings and Electronic Arts 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

Other Complementary Tools

Commodity Directory
Find actively traded commodities issued by global exchanges
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Fundamental Analysis
View fundamental data based on most recent published financial statements
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
AI Investment Finder
Use AI to screen and filter profitable investment opportunities
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance