Correlation Between SNM Gobal and AMC Entertainment

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Can any of the company-specific risk be diversified away by investing in both SNM Gobal 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 SNM Gobal and AMC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNM Gobal Holdings and AMC Entertainment Holdings, you can compare the effects of market volatilities on SNM Gobal 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 SNM Gobal with a short position of AMC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNM Gobal and AMC Entertainment.

Diversification Opportunities for SNM Gobal and AMC Entertainment

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between SNM and AMC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SNM Gobal Holdings and AMC Entertainment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Entertainment and SNM Gobal 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 SNM Gobal Holdings 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 SNM Gobal i.e., SNM Gobal and AMC Entertainment go up and down completely randomly.

Pair Corralation between SNM Gobal and AMC Entertainment

Given the investment horizon of 90 days SNM Gobal Holdings is expected to generate 1.84 times more return on investment than AMC Entertainment. However, SNM Gobal is 1.84 times more volatile than AMC Entertainment Holdings. It trades about 0.04 of its potential returns per unit of risk. AMC Entertainment Holdings is currently generating about 0.01 per unit of risk. If you would invest  0.02  in SNM Gobal Holdings on August 26, 2024 and sell it today you would lose (0.01) from holding SNM Gobal Holdings or give up 50.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SNM Gobal Holdings  vs.  AMC Entertainment Holdings

 Performance 
       Timeline  
SNM Gobal Holdings 

Risk-Adjusted Performance

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Over the last 90 days SNM Gobal Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, SNM Gobal is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
AMC Entertainment 

Risk-Adjusted Performance

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Over the last 90 days AMC Entertainment Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

SNM Gobal and AMC Entertainment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SNM Gobal and AMC Entertainment

The main advantage of trading using opposite SNM Gobal and AMC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNM Gobal 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 SNM Gobal Holdings 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.
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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