Correlation Between Cinemark Holdings and Marcus

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

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

Diversification Opportunities for Cinemark Holdings and Marcus

0.78

Correlation Coefficient

Cinemark Holdings  Marcus

Poor diversification

The 3 months correlation between Cinemark and Marcus is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cinemark Holdings and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus 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 Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of Cinemark Holdings i.e., Cinemark Holdings and Marcus go up and down completely randomly.

Pair Corralation between Cinemark Holdings and Marcus

Considering the 90-day investment horizon Cinemark Holdings is expected to under-perform the Marcus. In addition to that, Cinemark Holdings is 1.56 times more volatile than Marcus. It trades about -0.18 of its total potential returns per unit of risk. Marcus is currently generating about -0.08 per unit of volatility. If you would invest  2,256  in Marcus on November 29, 2024 and sell it today you would lose (169.00) from holding Marcus or give up 7.49% of portfolio value over 90 days.

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

Cinemark Holdings  vs.  Marcus

Cinemark Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cinemark Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Marcus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marcus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Cinemark Holdings and Marcus

The main advantage of trading using opposite Cinemark Holdings and Marcus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cinemark Holdings position performs unexpectedly, Marcus 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 Marcus will offset losses from the drop in Marcus' long position.

The idea behind Cinemark Holdings and Marcus 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.