Correlation Between Imax Corp and AMC Networks

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

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

Diversification Opportunities for Imax Corp and AMC Networks

-0.04

Correlation Coefficient

Imax Corp  AMC Networks

Good diversification

The 3 months correlation between Imax and AMC is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Imax Corp and AMC Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Networks and Imax Corp 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 Imax Corp are associated (or correlated) with AMC Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMC Networks has no effect on the direction of Imax Corp i.e., Imax Corp and AMC Networks go up and down completely randomly.

Pair Corralation between Imax Corp and AMC Networks

Given the investment horizon of 90 days Imax Corp is expected to generate 1.81 times less return on investment than AMC Networks. But when comparing it to its historical volatility, Imax Corp is 1.51 times less risky than AMC Networks. It trades about 0.07 of its potential returns per unit of risk. AMC Networks is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,328  in AMC Networks on February 18, 2024 and sell it today you would earn a total of  233.00  from holding AMC Networks or generate 17.55% return on investment over 90 days.

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

Imax Corp  vs.  AMC Networks

Imax Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Imax Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Imax Corp may actually be approaching a critical reversion point that can send shares even higher in June 2024.

AMC Networks

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AMC Networks are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, AMC Networks showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Imax Corp and AMC Networks

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

The idea behind Imax Corp and AMC Networks 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.