Correlation Between IQIYI and AMC Entertainment
Can any of the company-specific risk be diversified away by investing in both IQIYI 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 IQIYI and AMC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iQIYI Inc and AMC Entertainment Holdings, you can compare the effects of market volatilities on IQIYI 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 IQIYI with a short position of AMC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQIYI and AMC Entertainment.
Diversification Opportunities for IQIYI and AMC Entertainment
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IQIYI and AMC is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and AMC Entertainment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Entertainment and IQIYI 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 iQIYI Inc 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 IQIYI i.e., IQIYI and AMC Entertainment go up and down completely randomly.
Pair Corralation between IQIYI and AMC Entertainment
Allowing for the 90-day total investment horizon iQIYI Inc is expected to generate 1.16 times more return on investment than AMC Entertainment. However, IQIYI is 1.16 times more volatile than AMC Entertainment Holdings. It trades about -0.01 of its potential returns per unit of risk. AMC Entertainment Holdings is currently generating about -0.16 per unit of risk. If you would invest 246.00 in iQIYI Inc on November 1, 2024 and sell it today you would lose (14.00) from holding iQIYI Inc or give up 5.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iQIYI Inc vs. AMC Entertainment Holdings
Performance |
| Timeline |
| iQIYI Inc |
| AMC Entertainment |
IQIYI and AMC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQIYI and AMC Entertainment
The main advantage of trading using opposite IQIYI and AMC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQIYI 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.The idea behind iQIYI Inc and AMC Entertainment Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AMC Entertainment vs. Cinemark Holdings | AMC Entertainment vs. Roku Inc | AMC Entertainment vs. Netflix | AMC Entertainment vs. Paramount Global Class |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |