Correlation Between AMC Entertainment and Marchex
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Marchex 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 Marchex 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 Marchex, you can compare the effects of market volatilities on AMC Entertainment and Marchex 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 Marchex. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Marchex.
Diversification Opportunities for AMC Entertainment and Marchex
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMC and Marchex is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex 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 Marchex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marchex has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Marchex go up and down completely randomly.
Pair Corralation between AMC Entertainment and Marchex
Considering the 90-day investment horizon AMC Entertainment Holdings is expected to under-perform the Marchex. In addition to that, AMC Entertainment is 1.8 times more volatile than Marchex. It trades about -0.32 of its total potential returns per unit of risk. Marchex is currently generating about -0.12 per unit of volatility. If you would invest 203.00 in Marchex on November 9, 2024 and sell it today you would lose (10.00) from holding Marchex or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. Marchex
Performance |
| Timeline |
| AMC Entertainment |
| Marchex |
AMC Entertainment and Marchex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and Marchex
The main advantage of trading using opposite AMC Entertainment and Marchex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Marchex 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 Marchex will offset losses from the drop in Marchex's long position.| AMC Entertainment vs. Cinemark Holdings | AMC Entertainment vs. Roku Inc | AMC Entertainment vs. Netflix | AMC Entertainment vs. Paramount Global Class |
| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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