Correlation Between AMC Entertainment and Beasley Broadcast

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Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Beasley Broadcast 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 Beasley Broadcast 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 Beasley Broadcast Group, you can compare the effects of market volatilities on AMC Entertainment and Beasley Broadcast 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 Beasley Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Beasley Broadcast.

Diversification Opportunities for AMC Entertainment and Beasley Broadcast

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between AMC and Beasley is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Beasley Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beasley Broadcast 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 Beasley Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beasley Broadcast has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Beasley Broadcast go up and down completely randomly.

Pair Corralation between AMC Entertainment and Beasley Broadcast

Considering the 90-day investment horizon AMC Entertainment Holdings is expected to under-perform the Beasley Broadcast. In addition to that, AMC Entertainment is 1.04 times more volatile than Beasley Broadcast Group. It trades about -0.25 of its total potential returns per unit of risk. Beasley Broadcast Group is currently generating about -0.12 per unit of volatility. If you would invest  90.00  in Beasley Broadcast Group on December 30, 2023 and sell it today you would lose (12.00) from holding Beasley Broadcast Group or give up 13.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

AMC Entertainment Holdings  vs.  Beasley Broadcast Group

 Performance 
       Timeline  
AMC Entertainment 

Risk-Adjusted Performance

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Very Weak
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 weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Beasley Broadcast 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Beasley Broadcast Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

AMC Entertainment and Beasley Broadcast Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AMC Entertainment and Beasley Broadcast

The main advantage of trading using opposite AMC Entertainment and Beasley Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Beasley Broadcast 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 Beasley Broadcast will offset losses from the drop in Beasley Broadcast's long position.
The idea behind AMC Entertainment Holdings and Beasley Broadcast Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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