Correlation Between First Physicians and Cinemark Holdings

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

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

Diversification Opportunities for First Physicians and Cinemark Holdings

0.0

Correlation Coefficient

First Physicians  Cinemark Holdings

Pay attention - limited upside

The 3 months correlation between First and Cinemark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Physicians Capital and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and First Physicians 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 First Physicians Capital 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 First Physicians i.e., First Physicians and Cinemark Holdings go up and down completely randomly.

Pair Corralation between First Physicians and Cinemark Holdings

If you would invest  2,875  in Cinemark Holdings on September 13, 2024 and sell it today you would earn a total of  428.00  from holding Cinemark Holdings or generate 14.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

First Physicians Capital  vs.  Cinemark Holdings

First Physicians Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Physicians Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, First Physicians 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

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cinemark Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Cinemark Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Physicians and Cinemark Holdings

The main advantage of trading using opposite First Physicians and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Physicians 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 First Physicians Capital 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 Commodity Directory module to find actively traded commodities issued by global exchanges.