Correlation Between AMC Entertainment and Gaia
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Gaia 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 Gaia 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 Gaia Inc, you can compare the effects of market volatilities on AMC Entertainment and Gaia 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 Gaia. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Gaia.
Diversification Opportunities for AMC Entertainment and Gaia
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMC and Gaia is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Gaia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaia Inc 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 Gaia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaia Inc has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Gaia go up and down completely randomly.
Pair Corralation between AMC Entertainment and Gaia
Considering the 90-day investment horizon AMC Entertainment is expected to generate 1.18 times less return on investment than Gaia. But when comparing it to its historical volatility, AMC Entertainment Holdings is 1.03 times less risky than Gaia. It trades about 0.15 of its potential returns per unit of risk. Gaia Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 561.00 in Gaia Inc on August 27, 2024 and sell it today you would earn a total of 64.00 from holding Gaia Inc or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. Gaia Inc
Performance |
| Timeline |
| AMC Entertainment |
| Gaia Inc |
AMC Entertainment and Gaia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and Gaia
The main advantage of trading using opposite AMC Entertainment and Gaia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Gaia 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 Gaia will offset losses from the drop in Gaia's long position.| AMC Entertainment vs. Cinemark Holdings | AMC Entertainment vs. Roku Inc | AMC Entertainment vs. Netflix | AMC Entertainment vs. Paramount Global Class |
| Gaia vs. ADTRAN Inc | Gaia vs. Belden Inc | Gaia vs. ADC Therapeutics SA | Gaia vs. Comtech Telecommunications Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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