Correlation Between Disney and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both Disney 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 Disney and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Cinemark Holdings, you can compare the effects of market volatilities on Disney 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 Disney with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Cinemark Holdings.
Diversification Opportunities for Disney and Cinemark Holdings
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Disney and Cinemark is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Disney 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 Walt Disney 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 Disney i.e., Disney and Cinemark Holdings go up and down completely randomly.
Pair Corralation between Disney and Cinemark Holdings
Considering the 90-day investment horizon Walt Disney is expected to under-perform the Cinemark Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Walt Disney is 1.68 times less risky than Cinemark Holdings. The stock trades about -0.17 of its potential returns per unit of risk. The Cinemark Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,773 in Cinemark Holdings on January 25, 2024 and sell it today you would earn a total of 10.00 from holding Cinemark Holdings or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. Cinemark Holdings
Performance |
| Timeline |
| Walt Disney |
| Cinemark Holdings |
Disney and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Cinemark Holdings
The main advantage of trading using opposite Disney and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney 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.| Disney vs. Roku Inc | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery | Disney vs. Paramount Global Class |
| Cinemark Holdings vs. Roku Inc | Cinemark Holdings vs. Paramount Global Class | Cinemark Holdings vs. Warner Bros Discovery | Cinemark Holdings vs. Paramount Global Class |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |