Correlation Between Shaw Communications and AMC Entertainment

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

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

Diversification Opportunities for Shaw Communications and AMC Entertainment

0.2

Correlation Coefficient

Shaw Communications  AMC Entertainment

Modest diversification

The 3 months correlation between Shaw and AMC is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Shaw Communications Class and AMC Entertainment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Entertainment and Shaw Communications 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 Shaw Communications Class 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 Shaw Communications i.e., Shaw Communications and AMC Entertainment go up and down completely randomly.

Pair Corralation between Shaw Communications and AMC Entertainment

If you would invest  3,018  in Shaw Communications Class on January 23, 2024 and sell it today you would earn a total of  0.00  from holding Shaw Communications Class or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Shaw Communications Class  vs.  AMC Entertainment Holdings

Shaw Communications Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shaw Communications Class has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking indicators, Shaw Communications is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

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

Pair Trading with Shaw Communications and AMC Entertainment

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

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.