Correlation Between AMC Entertainment and American Picture
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and American Picture 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 AMC Entertainment and American Picture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMC Entertainment Holdings and American Picture House, you can compare the effects of market volatilities on AMC Entertainment and American Picture 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 AMC Entertainment with a short position of American Picture. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and American Picture.
Diversification Opportunities for AMC Entertainment and American Picture
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMC and American is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and American Picture House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Picture House and AMC Entertainment 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 AMC Entertainment Holdings are associated (or correlated) with American Picture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Picture House has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and American Picture go up and down completely randomly.
Pair Corralation between AMC Entertainment and American Picture
Considering the 90-day investment horizon AMC Entertainment Holdings is expected to under-perform the American Picture. But the stock apears to be less risky and, when comparing its historical volatility, AMC Entertainment Holdings is 2.56 times less risky than American Picture. The stock trades about -0.21 of its potential returns per unit of risk. The American Picture House is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 25.00 in American Picture House on October 20, 2024 and sell it today you would earn a total of 8.00 from holding American Picture House or generate 32.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. American Picture House
Performance |
| Timeline |
| AMC Entertainment |
| American Picture House |
AMC Entertainment and American Picture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and American Picture
The main advantage of trading using opposite AMC Entertainment and American Picture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, American Picture 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 American Picture will offset losses from the drop in American Picture's long position.| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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