Correlation Between AMC Entertainment and Imax Corp
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Imax Corp 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 Imax Corp 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 Imax Corp, you can compare the effects of market volatilities on AMC Entertainment and Imax Corp 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 Imax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Imax Corp.
Diversification Opportunities for AMC Entertainment and Imax Corp
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMC and Imax is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Imax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imax Corp 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 Imax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imax Corp has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Imax Corp go up and down completely randomly.
Pair Corralation between AMC Entertainment and Imax Corp
Considering the 90-day investment horizon AMC Entertainment is expected to generate 1.99 times less return on investment than Imax Corp. In addition to that, AMC Entertainment is 1.59 times more volatile than Imax Corp. It trades about 0.05 of its total potential returns per unit of risk. Imax Corp is currently generating about 0.15 per unit of volatility. If you would invest 1,663 in Imax Corp on August 28, 2024 and sell it today you would earn a total of 862.00 from holding Imax Corp or generate 51.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. Imax Corp
Performance |
| Timeline |
| AMC Entertainment |
| Imax Corp |
AMC Entertainment and Imax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and Imax Corp
The main advantage of trading using opposite AMC Entertainment and Imax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Imax Corp 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 Imax Corp will offset losses from the drop in Imax Corp's long position.| AMC Entertainment vs. Cinemark Holdings | AMC Entertainment vs. Roku Inc | AMC Entertainment vs. Netflix | AMC Entertainment vs. Paramount Global Class |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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