Correlation Between AMC Entertainment and Hollywood Intermediate
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Hollywood Intermediate 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 Hollywood Intermediate 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 Hollywood Intermediate, you can compare the effects of market volatilities on AMC Entertainment and Hollywood Intermediate 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 Hollywood Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Hollywood Intermediate.
Diversification Opportunities for AMC Entertainment and Hollywood Intermediate
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AMC and Hollywood is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Hollywood Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Intermediate 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 Hollywood Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Intermediate has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Hollywood Intermediate go up and down completely randomly.
Pair Corralation between AMC Entertainment and Hollywood Intermediate
Considering the 90-day investment horizon AMC Entertainment Holdings is expected to under-perform the Hollywood Intermediate. In addition to that, AMC Entertainment is 1.61 times more volatile than Hollywood Intermediate. It trades about -0.04 of its total potential returns per unit of risk. Hollywood Intermediate is currently generating about -0.04 per unit of volatility. If you would invest 0.01 in Hollywood Intermediate on October 11, 2024 and sell it today you would lose (0.01) from holding Hollywood Intermediate or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. Hollywood Intermediate
Performance |
| Timeline |
| AMC Entertainment |
| Hollywood Intermediate |
AMC Entertainment and Hollywood Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and Hollywood Intermediate
The main advantage of trading using opposite AMC Entertainment and Hollywood Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Hollywood Intermediate 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 Hollywood Intermediate will offset losses from the drop in Hollywood Intermediate's long position.| AMC Entertainment vs. Cinemark Holdings | AMC Entertainment vs. Roku Inc | AMC Entertainment vs. Netflix | AMC Entertainment vs. Paramount Global Class |
| Hollywood Intermediate vs. AMC Entertainment Holdings | Hollywood Intermediate vs. Cinemark Holdings | Hollywood Intermediate vs. Roku Inc | Hollywood Intermediate vs. Netflix |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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