AMC Entertainment Holdings Inc stock (NYSE: AMC) has shot up more than 32% in the last one month and currently trades at $47 per share. The recent rise was driven by Walt Disney’s announcement that it would release its upcoming films exclusively in theaters for the rest of 2021. Disney had initially begun releasing its movies on its Disney+ streaming platform after the theaters were shut due to lockdowns being imposed on account of the pandemic. But even after some restrictions were lifted, Disney made some of its biggest blockbusters available on Disney+ on the same day they hit theaters. However, after the impressive box office performance of Shang-Chi and the Legend of the 10 Rings, Disney is returning to its traditional theater-first release strategy. The latest Marvel film has already grossed almost $250 million during just its first two weeks in theaters. These strong results show that people are returning to theaters in droves, despite the prevalence of Covid. A recovery in theater footfalls is certainly good news for AMC. Rebounding attendance could help boost sales at a time when the theater chain is struggling to service its burdensome debt load. This has also played a key role in the strong rise in AMC stock recently.
But, after the recent rise, will AMC’s stock continue its upward trajectory over the coming weeks, or is a correction in the stock more likely? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data for the last eight years, returns for AMC stock average more than 70% in the next three-month (63 trading days) period after experiencing a 32.5% rise over the previous one-month (21 trading days) period. Also, there is a 63% probability that the stock will give a positive return in the next three months. But how would these numbers change if you are interested in holding AMC stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test AMC stock chances of a rise after a fall and vice versa. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!
MACHINE LEARNING ENGINE – try it yourself:
IF AMC stock moved by -5% over five trading days, THEN over the next 21 trading days, AMC stock moves an average of 17.6 percent.
Some Fun Scenarios, FAQs & Making Sense of AMC Stock Movements:
Question 1: Is the average return for AMC Entertainment Holdings stock higher after a drop?
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Consider two situations,
Case 1: AMC Entertainment Holdings stock drops by -5% or more in a week
Case 2: AMC Entertainment Holdings stock rises by 5% or more in a week
Is the average return for AMC Entertainment Holdings stock higher over the subsequent month after Case 1 or Case 2?
AMC stock fares better after Case 1, with an average return of 18% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 11.1% for Case 2.
In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.
Try the Trefis machine learning engine above to see for yourself how AMC Entertainment Holdings stock is likely to behave after any specific gain or loss over a period.
Question 2: Does patience pay?
If you buy and hold AMC Entertainment Holdings stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.
Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!
For AMC stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:
Question 3: What about the average return after a rise if you wait for a while?
The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although AMC stock appears to be an exception to this general observation.
AMC’s returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:
It’s pretty powerful to test the trend for yourself for AMC Entertainment Holdings stock by changing the inputs in the charts above.
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