Correlation Between Cinemark Holdings and CTS Eventim

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

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

Diversification Opportunities for Cinemark Holdings and CTS Eventim

-0.63

Correlation Coefficient

Cinemark Holdings  CTS Eventim

Excellent diversification

The 3 months correlation between Cinemark and CTS is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cinemark Holdings and CTS Eventim AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Eventim AG 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 CTS Eventim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Eventim AG has no effect on the direction of Cinemark Holdings i.e., Cinemark Holdings and CTS Eventim go up and down completely randomly.

Pair Corralation between Cinemark Holdings and CTS Eventim

Assuming the 90 days horizon Cinemark Holdings is expected to under-perform the CTS Eventim. In addition to that, Cinemark Holdings is 1.73 times more volatile than CTS Eventim AG. It trades about -0.11 of its total potential returns per unit of risk. CTS Eventim AG is currently generating about 0.24 per unit of volatility. If you would invest  8,200  in CTS Eventim AG on December 28, 2024 and sell it today you would earn a total of  1,930  from holding CTS Eventim AG or generate 23.54% return on investment over 90 days.

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

Cinemark Holdings  vs.  CTS Eventim AG

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.

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 uncertain basic indicators, CTS Eventim reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cinemark Holdings and CTS Eventim

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

The idea behind Cinemark Holdings and CTS Eventim AG 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.