Correlation Between AMC Entertainment and Hanover House
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Hanover House 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 Hanover House 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 Hanover House, you can compare the effects of market volatilities on AMC Entertainment and Hanover House 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 Hanover House. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Hanover House.
Diversification Opportunities for AMC Entertainment and Hanover House
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMC and Hanover is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Hanover House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover 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 Hanover House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover House has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Hanover House go up and down completely randomly.
Pair Corralation between AMC Entertainment and Hanover House
Considering the 90-day investment horizon AMC Entertainment Holdings is expected to under-perform the Hanover House. But the stock apears to be less risky and, when comparing its historical volatility, AMC Entertainment Holdings is 1.58 times less risky than Hanover House. The stock trades about -0.04 of its potential returns per unit of risk. The Hanover House is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.46 in Hanover House on September 2, 2024 and sell it today you would earn a total of 0.26 from holding Hanover House or generate 56.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.74% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. Hanover House
Performance |
| Timeline |
| AMC Entertainment |
| Hanover House |
AMC Entertainment and Hanover House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and Hanover House
The main advantage of trading using opposite AMC Entertainment and Hanover House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Hanover House 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 Hanover House will offset losses from the drop in Hanover House's long position.| AMC Entertainment vs. Cinemark Holdings | AMC Entertainment vs. Roku Inc | AMC Entertainment vs. Netflix | AMC Entertainment vs. Paramount Global Class |
| Hanover House vs. Sanwire | Hanover House vs. SNM Gobal Holdings | Hanover House vs. All For One | Hanover House vs. Ggtoor Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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