Correlation Between WiMi Hologram and AMC Entertainment

Can any of the company-specific risk be diversified away by investing in both WiMi Hologram 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 WiMi Hologram and AMC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WiMi Hologram Cloud and AMC Entertainment Holdings, you can compare the effects of market volatilities on WiMi Hologram 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 WiMi Hologram with a short position of AMC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiMi Hologram and AMC Entertainment.

Diversification Opportunities for WiMi Hologram and AMC Entertainment

0.5

Correlation Coefficient

WiMi Hologram  AMC Entertainment

Very weak diversification

The 3 months correlation between WiMi and AMC is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding WiMi Hologram Cloud and AMC Entertainment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Entertainment and WiMi Hologram 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 WiMi Hologram Cloud 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 WiMi Hologram i.e., WiMi Hologram and AMC Entertainment go up and down completely randomly.

Pair Corralation between WiMi Hologram and AMC Entertainment

Given the investment horizon of 90 days WiMi Hologram Cloud is expected to generate 0.91 times more return on investment than AMC Entertainment. However, WiMi Hologram Cloud is 1.1 times less risky than AMC Entertainment. It trades about 0.03 of its potential returns per unit of risk. AMC Entertainment Holdings is currently generating about -0.05 per unit of risk. If you would invest  102.00  in WiMi Hologram Cloud on February 26, 2024 and sell it today you would lose (16.00) from holding WiMi Hologram Cloud or give up 15.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

WiMi Hologram Cloud  vs.  AMC Entertainment Holdings

WiMi Hologram Cloud

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WiMi Hologram Cloud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, WiMi Hologram is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

AMC Entertainment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AMC Entertainment Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, AMC Entertainment exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WiMi Hologram and AMC Entertainment

The main advantage of trading using opposite WiMi Hologram and AMC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiMi Hologram 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 WiMi Hologram Cloud 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.