Correlation Between AMC Entertainment and Disney
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Disney 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 Disney 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 Walt Disney, you can compare the effects of market volatilities on AMC Entertainment and Disney 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 Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Disney.
Diversification Opportunities for AMC Entertainment and Disney
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMC and Disney is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney 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 Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Disney go up and down completely randomly.
Pair Corralation between AMC Entertainment and Disney
Considering the 90-day investment horizon AMC Entertainment Holdings is expected to under-perform the Disney. In addition to that, AMC Entertainment is 3.82 times more volatile than Walt Disney. It trades about -0.34 of its total potential returns per unit of risk. Walt Disney is currently generating about 0.11 per unit of volatility. If you would invest 11,082 in Walt Disney on November 3, 2024 and sell it today you would earn a total of 224.00 from holding Walt Disney or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. Walt Disney
Performance |
| Timeline |
| AMC Entertainment |
| Walt Disney |
AMC Entertainment and Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and Disney
The main advantage of trading using opposite AMC Entertainment and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney's long position.| AMC Entertainment vs. Cinemark Holdings | AMC Entertainment vs. Roku Inc | AMC Entertainment vs. Netflix | AMC Entertainment vs. Paramount Global Class |
| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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