Correlation Between Core Main and AMC Entertainment
Can any of the company-specific risk be diversified away by investing in both Core Main and AMC Entertainment 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 Core Main and AMC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Main and AMC Entertainment Holdings, you can compare the effects of market volatilities on Core Main and AMC Entertainment 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 Core Main with a short position of AMC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Main and AMC Entertainment.
Diversification Opportunities for Core Main and AMC Entertainment
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Core and AMC is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Core Main and AMC Entertainment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Entertainment and Core Main 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 Core Main are associated (or correlated) with AMC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMC Entertainment has no effect on the direction of Core Main i.e., Core Main and AMC Entertainment go up and down completely randomly.
Pair Corralation between Core Main and AMC Entertainment
Considering the 90-day investment horizon Core Main is expected to generate 0.29 times more return on investment than AMC Entertainment. However, Core Main is 3.39 times less risky than AMC Entertainment. It trades about 0.08 of its potential returns per unit of risk. AMC Entertainment Holdings is currently generating about -0.04 per unit of risk. If you would invest 2,081 in Core Main on August 27, 2024 and sell it today you would earn a total of 2,446 from holding Core Main or generate 117.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Main vs. AMC Entertainment Holdings
Performance |
| Timeline |
| Core Main |
| AMC Entertainment |
Core Main and AMC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Main and AMC Entertainment
The main advantage of trading using opposite Core Main and AMC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Main position performs unexpectedly, AMC Entertainment 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 AMC Entertainment will offset losses from the drop in AMC Entertainment's long position.| Core Main vs. Distribution Solutions Group | Core Main vs. Global Industrial Co | Core Main vs. Applied Industrial Technologies | Core Main vs. BlueLinx Holdings |
| AMC Entertainment vs. ADTRAN Inc | AMC Entertainment vs. Belden Inc | AMC Entertainment vs. ADC Therapeutics SA | AMC Entertainment 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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