Correlation Between CTS Eventim and Cinemark Holdings

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

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

Diversification Opportunities for CTS Eventim and Cinemark Holdings

-0.63

Correlation Coefficient

CTS Eventim  Cinemark Holdings

Excellent diversification

The 3 months correlation between CTS and Cinemark is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding CTS Eventim AG and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and CTS Eventim 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 CTS Eventim AG 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 CTS Eventim i.e., CTS Eventim and Cinemark Holdings go up and down completely randomly.

Pair Corralation between CTS Eventim and Cinemark Holdings

Assuming the 90 days horizon CTS Eventim AG is expected to under-perform the Cinemark Holdings. But the stock apears to be less risky and, when comparing its historical volatility, CTS Eventim AG is 2.11 times less risky than Cinemark Holdings. The stock trades about -0.19 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  2,440  in Cinemark Holdings on December 29, 2024 and sell it today you would lose (32.00) from holding Cinemark Holdings or give up 1.31% of portfolio value over 90 days.

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

CTS Eventim AG  vs.  Cinemark Holdings

CTS Eventim AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CTS Eventim AG are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, CTS Eventim reported solid returns over the last few months and may actually be approaching a breakup point.

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CTS Eventim and Cinemark Holdings

The main advantage of trading using opposite CTS Eventim and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTS Eventim 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 CTS Eventim AG 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.