Correlation Between HeadsUp Entertainment and AMC Entertainment

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

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

Diversification Opportunities for HeadsUp Entertainment and AMC Entertainment

-0.08

Correlation Coefficient

HeadsUp Entertainment  AMC Entertainment

Good diversification

The 3 months correlation between HeadsUp and AMC is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding HeadsUp Entertainment Internat and AMC Entertainment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Entertainment and HeadsUp 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 HeadsUp Entertainment International 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 HeadsUp Entertainment i.e., HeadsUp Entertainment and AMC Entertainment go up and down completely randomly.

Pair Corralation between HeadsUp Entertainment and AMC Entertainment

Given the investment horizon of 90 days HeadsUp Entertainment International is expected to generate 1.79 times more return on investment than AMC Entertainment. However, HeadsUp Entertainment is 1.79 times more volatile than AMC Entertainment Holdings. It trades about 0.03 of its potential returns per unit of risk. AMC Entertainment Holdings is currently generating about -0.04 per unit of risk. If you would invest  3.13  in HeadsUp Entertainment International on October 12, 2024 and sell it today you would lose (2.64) from holding HeadsUp Entertainment International or give up 84.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

HeadsUp Entertainment Internat  vs.  AMC Entertainment Holdings

HeadsUp Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HeadsUp Entertainment International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise 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 rather sound primary indicators, AMC Entertainment is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with HeadsUp Entertainment and AMC Entertainment

The main advantage of trading using opposite HeadsUp Entertainment and AMC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeadsUp Entertainment 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 HeadsUp Entertainment International 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.