Correlation Between Color Star and AMC Entertainment
Can any of the company-specific risk be diversified away by investing in both Color Star and AMC Entertainment 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 Color Star and AMC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Color Star Technology and AMC Entertainment Holdings, you can compare the effects of market volatilities on Color Star and AMC Entertainment 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 Color Star with a short position of AMC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Color Star and AMC Entertainment.
Diversification Opportunities for Color Star and AMC Entertainment
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Color and AMC is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Color Star Technology and AMC Entertainment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Entertainment and Color Star 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 Color Star Technology are associated (or correlated) with AMC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMC Entertainment has no effect on the direction of Color Star i.e., Color Star and AMC Entertainment go up and down completely randomly.
Pair Corralation between Color Star and AMC Entertainment
Considering the 90-day investment horizon Color Star Technology is expected to under-perform the AMC Entertainment. In addition to that, Color Star is 3.99 times more volatile than AMC Entertainment Holdings. It trades about -0.42 of its total potential returns per unit of risk. AMC Entertainment Holdings is currently generating about 0.12 per unit of volatility. If you would invest 444.00 in AMC Entertainment Holdings on August 30, 2024 and sell it today you would earn a total of 36.00 from holding AMC Entertainment Holdings or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Color Star Technology vs. AMC Entertainment Holdings
Performance |
| Timeline |
| Color Star Technology |
| AMC Entertainment |
Color Star and AMC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Color Star and AMC Entertainment
The main advantage of trading using opposite Color Star and AMC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Color Star position performs unexpectedly, AMC Entertainment 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 AMC Entertainment will offset losses from the drop in AMC Entertainment's long position.| Color Star vs. Guild Esports Plc | Color Star vs. New Wave Holdings | Color Star vs. Network Media Group | Color Star vs. Hall of Fame |
| AMC Entertainment vs. Cinemark Holdings | AMC Entertainment vs. Roku Inc | AMC Entertainment vs. Netflix | AMC Entertainment vs. Paramount Global Class |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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