Correlation Between Heico and Cinemark Holdings
Can any of the company-specific risk be diversified away by investing in both Heico 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 Heico and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heico and Cinemark Holdings, you can compare the effects of market volatilities on Heico 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 Heico with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heico and Cinemark Holdings.
Diversification Opportunities for Heico and Cinemark Holdings
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Heico and Cinemark is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Heico and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Heico 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 Heico 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 Heico i.e., Heico and Cinemark Holdings go up and down completely randomly.
Pair Corralation between Heico and Cinemark Holdings
Considering the 90-day investment horizon Heico is expected to generate 0.59 times more return on investment than Cinemark Holdings. However, Heico is 1.69 times less risky than Cinemark Holdings. It trades about 0.28 of its potential returns per unit of risk. Cinemark Holdings is currently generating about 0.02 per unit of risk. If you would invest 19,043 in Heico on January 25, 2024 and sell it today you would earn a total of 1,439 from holding Heico or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heico vs. Cinemark Holdings
Performance |
| Timeline |
| Heico |
| Cinemark Holdings |
Heico and Cinemark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heico and Cinemark Holdings
The main advantage of trading using opposite Heico and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heico 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.| Heico vs. HEICO | Heico vs. L3Harris Technologies | Heico vs. Huntington Ingalls Industries | Heico vs. Lockheed Martin |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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