Correlation Between Cinemark Holdings and Chevron Corp
Can any of the company-specific risk be diversified away by investing in both Cinemark Holdings and Chevron Corp 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 Chevron Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cinemark Holdings and Chevron Corp, you can compare the effects of market volatilities on Cinemark Holdings and Chevron Corp 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 Chevron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cinemark Holdings and Chevron Corp.
Diversification Opportunities for Cinemark Holdings and Chevron Corp
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cinemark and Chevron is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cinemark Holdings and Chevron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron Corp 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 Chevron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron Corp has no effect on the direction of Cinemark Holdings i.e., Cinemark Holdings and Chevron Corp go up and down completely randomly.
Pair Corralation between Cinemark Holdings and Chevron Corp
Considering the 90-day investment horizon Cinemark Holdings is expected to under-perform the Chevron Corp. In addition to that, Cinemark Holdings is 2.61 times more volatile than Chevron Corp. It trades about -0.07 of its total potential returns per unit of risk. Chevron Corp is currently generating about 0.09 per unit of volatility. If you would invest 15,541 in Chevron Corp on January 17, 2024 and sell it today you would earn a total of 218.00 from holding Chevron Corp or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cinemark Holdings vs. Chevron Corp
Performance |
| Timeline |
| Cinemark Holdings |
| Chevron Corp |
Cinemark Holdings and Chevron Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cinemark Holdings and Chevron Corp
The main advantage of trading using opposite Cinemark Holdings and Chevron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinemark Holdings position performs unexpectedly, Chevron Corp 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 Chevron Corp will offset losses from the drop in Chevron Corp's long position.The idea behind Cinemark Holdings and Chevron Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |