Correlation Between DevEx Resources and Cinemark Holdings

Can any of the company-specific risk be diversified away by investing in both DevEx Resources 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 DevEx Resources and Cinemark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DevEx Resources Limited and Cinemark Holdings, you can compare the effects of market volatilities on DevEx Resources 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 DevEx Resources with a short position of Cinemark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of DevEx Resources and Cinemark Holdings.

Diversification Opportunities for DevEx Resources and Cinemark Holdings

-0.64

Correlation Coefficient

DevEx Resources  Cinemark Holdings

Excellent diversification

The 3 months correlation between DevEx and Cinemark is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding DevEx Resources Limited and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and DevEx Resources 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 DevEx Resources Limited 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 DevEx Resources i.e., DevEx Resources and Cinemark Holdings go up and down completely randomly.

Pair Corralation between DevEx Resources and Cinemark Holdings

Assuming the 90 days horizon DevEx Resources is expected to generate 10.01 times less return on investment than Cinemark Holdings. In addition to that, DevEx Resources is 7.0 times more volatile than Cinemark Holdings. It trades about 0.0 of its total potential returns per unit of risk. Cinemark Holdings is currently generating about 0.18 per unit of volatility. If you would invest  2,550  in Cinemark Holdings on September 12, 2024 and sell it today you would earn a total of  585.00  from holding Cinemark Holdings or generate 22.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

DevEx Resources Limited  vs.  Cinemark Holdings

DevEx Resources

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days DevEx Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, DevEx Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Cinemark Holdings

Risk-Adjusted Performance

13 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cinemark Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Cinemark Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DevEx Resources and Cinemark Holdings

The main advantage of trading using opposite DevEx Resources and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DevEx Resources 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.

The idea behind DevEx Resources Limited and Cinemark Holdings 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.