Correlation Between 00165CAB0 and Boeing

Can any of the company-specific risk be diversified away by investing in both 00165CAB0 and Boeing 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 00165CAB0 and Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AMC ENTMT HLDGS and The Boeing, you can compare the effects of market volatilities on 00165CAB0 and Boeing 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 00165CAB0 with a short position of Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00165CAB0 and Boeing.

Diversification Opportunities for 00165CAB0 and Boeing

0.4

Correlation Coefficient

00165CAB0  Boeing

Very weak diversification

The 3 months correlation between 00165CAB0 and Boeing is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding AMC ENTMT HLDGS and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and 00165CAB0 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 ENTMT HLDGS are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of 00165CAB0 i.e., 00165CAB0 and Boeing go up and down completely randomly.

Pair Corralation between 00165CAB0 and Boeing

Assuming the 90 days trading horizon AMC ENTMT HLDGS is expected to generate 4.62 times more return on investment than Boeing. However, 00165CAB0 is 4.62 times more volatile than The Boeing. It trades about 0.08 of its potential returns per unit of risk. The Boeing is currently generating about -0.36 per unit of risk. If you would invest  5,802  in AMC ENTMT HLDGS on January 20, 2024 and sell it today you would earn a total of  358.00  from holding AMC ENTMT HLDGS or generate 6.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

AMC ENTMT HLDGS  vs.  The Boeing

AMC ENTMT HLDGS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AMC ENTMT HLDGS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 00165CAB0 may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Boeing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Boeing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with 00165CAB0 and Boeing

The main advantage of trading using opposite 00165CAB0 and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00165CAB0 position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.

The idea behind AMC ENTMT HLDGS and The Boeing 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.