Correlation Between Celsius Holdings and Cinemark Holdings

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

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

Diversification Opportunities for Celsius Holdings and Cinemark Holdings

0.73

Correlation Coefficient

Celsius Holdings  Cinemark Holdings

Poor diversification

The 3 months correlation between Celsius and Cinemark is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Celsius Holdings and Cinemark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinemark Holdings and Celsius 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 Celsius Holdings 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 Celsius Holdings i.e., Celsius Holdings and Cinemark Holdings go up and down completely randomly.

Pair Corralation between Celsius Holdings and Cinemark Holdings

Given the investment horizon of 90 days Celsius Holdings is expected to generate 1.37 times more return on investment than Cinemark Holdings. However, Celsius Holdings is 1.37 times more volatile than Cinemark Holdings. It trades about 0.09 of its potential returns per unit of risk. Cinemark Holdings is currently generating about 0.02 per unit of risk. If you would invest  2,087  in Celsius Holdings on February 10, 2024 and sell it today you would earn a total of  6,194  from holding Celsius Holdings or generate 296.79% return on investment over 90 days.

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

Celsius Holdings  vs.  Cinemark Holdings

Celsius Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Celsius Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain essential indicators, Celsius Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Cinemark Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cinemark Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Cinemark Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celsius Holdings and Cinemark Holdings

The main advantage of trading using opposite Celsius Holdings and Cinemark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celsius Holdings 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 Celsius Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.