Correlation Between Twitter and AMC Entertainment
Can any of the company-specific risk be diversified away by investing in both Twitter 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 Twitter and AMC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twitter and AMC Entertainment Holdings, you can compare the effects of market volatilities on Twitter 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 Twitter with a short position of AMC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twitter and AMC Entertainment.
Diversification Opportunities for Twitter and AMC Entertainment
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Twitter and AMC is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and AMC Entertainment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Entertainment and Twitter 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 Twitter 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 Twitter i.e., Twitter and AMC Entertainment go up and down completely randomly.
Pair Corralation between Twitter and AMC Entertainment
If you would invest 5,370 in Twitter on January 19, 2024 and sell it today you would earn a total of 0.00 from holding Twitter or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 4.55% |
Values | Daily Returns |
Twitter vs. AMC Entertainment Holdings
Performance |
Timeline |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AMC Entertainment |
Twitter and AMC Entertainment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Twitter and AMC Entertainment
The main advantage of trading using opposite Twitter and AMC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter 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.Twitter vs. Harmony Gold Mining | Twitter vs. Balchem | Twitter vs. Chester Mining | Twitter vs. Titan Petrochemicals Group |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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