Correlation Between AMC Entertainment and Comcast Corp

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

Diversification Opportunities for AMC Entertainment and Comcast Corp

0.46

Correlation Coefficient

AMC Entertainment  Comcast Corp

Very weak diversification

The 3 months correlation between AMC and Comcast is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Comcast Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast Corp 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 Comcast Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast Corp has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Comcast Corp go up and down completely randomly.

Pair Corralation between AMC Entertainment and Comcast Corp

Considering the 90-day investment horizon AMC Entertainment Holdings is expected to under-perform the Comcast Corp. In addition to that, AMC Entertainment is 3.83 times more volatile than Comcast Corp. It trades about -0.14 of its total potential returns per unit of risk. Comcast Corp is currently generating about 0.02 per unit of volatility. If you would invest  3,909  in Comcast Corp on January 25, 2024 and sell it today you would earn a total of  112.00  from holding Comcast Corp or generate 2.87% return on investment over 90 days.

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

AMC Entertainment Holdings  vs.  Comcast Corp

AMC Entertainment

Risk-Adjusted Performance

0 of 100

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 latest uncertain 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.

Comcast Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comcast Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with AMC Entertainment and Comcast Corp

The main advantage of trading using opposite AMC Entertainment and Comcast Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Comcast Corp 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 Comcast Corp will offset losses from the drop in Comcast Corp's long position.

The idea behind AMC Entertainment Holdings and Comcast Corp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.