Correlation Between AMC Entertainment and Target
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Target 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 AMC Entertainment and Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMC Entertainment Holdings and Target, you can compare the effects of market volatilities on AMC Entertainment and Target 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 AMC Entertainment with a short position of Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Target.
Diversification Opportunities for AMC Entertainment and Target
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMC and Target is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target and AMC Entertainment 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 AMC Entertainment Holdings are associated (or correlated) with Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Target go up and down completely randomly.
Pair Corralation between AMC Entertainment and Target
Considering the 90-day investment horizon AMC Entertainment Holdings is expected to under-perform the Target. In addition to that, AMC Entertainment is 2.8 times more volatile than Target. It trades about -0.06 of its total potential returns per unit of risk. Target is currently generating about -0.01 per unit of volatility. If you would invest 21,298 in Target on January 26, 2024 and sell it today you would lose (4,764) from holding Target or give up 22.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. Target
Performance |
| Timeline |
| AMC Entertainment |
| Target |
AMC Entertainment and Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and Target
The main advantage of trading using opposite AMC Entertainment and Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Target 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 Target will offset losses from the drop in Target's long position.| AMC Entertainment vs. Roku Inc | AMC Entertainment vs. Paramount Global Class | AMC Entertainment vs. Warner Bros Discovery | AMC Entertainment vs. Paramount Global Class |
| Target vs. Costco Wholesale Corp | Target vs. BJs Wholesale Club | Target vs. Dollar Tree | Target vs. Dollar General |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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