Correlation Between AMC Entertainment and Consolidated Communications
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Consolidated Communications 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 Consolidated Communications 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 Consolidated Communications, you can compare the effects of market volatilities on AMC Entertainment and Consolidated Communications 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 Consolidated Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Consolidated Communications.
Diversification Opportunities for AMC Entertainment and Consolidated Communications
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMC and Consolidated is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Consolidated Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Communications 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 Consolidated Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Communications has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Consolidated Communications go up and down completely randomly.
Pair Corralation between AMC Entertainment and Consolidated Communications
Considering the 90-day investment horizon AMC Entertainment Holdings is expected to generate 9.18 times more return on investment than Consolidated Communications. However, AMC Entertainment is 9.18 times more volatile than Consolidated Communications. It trades about 0.13 of its potential returns per unit of risk. Consolidated Communications is currently generating about 0.12 per unit of risk. 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 Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. Consolidated Communications
Performance |
| Timeline |
| AMC Entertainment |
| Consolidated Communications |
AMC Entertainment and Consolidated Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and Consolidated Communications
The main advantage of trading using opposite AMC Entertainment and Consolidated Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Consolidated Communications 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 Consolidated Communications will offset losses from the drop in Consolidated Communications' 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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