Correlation Between AMC Entertainment and Gray Television
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Gray Television 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 AMC Entertainment and Gray Television into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMC Entertainment Holdings and Gray Television, you can compare the effects of market volatilities on AMC Entertainment and Gray Television 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 AMC Entertainment with a short position of Gray Television. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Gray Television.
Diversification Opportunities for AMC Entertainment and Gray Television
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMC and Gray is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Gray Television in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gray Television and AMC 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 AMC Entertainment Holdings are associated (or correlated) with Gray Television. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gray Television has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Gray Television go up and down completely randomly.
Pair Corralation between AMC Entertainment and Gray Television
Considering the 90-day investment horizon AMC Entertainment Holdings is expected to under-perform the Gray Television. In addition to that, AMC Entertainment is 1.87 times more volatile than Gray Television. It trades about -0.04 of its total potential returns per unit of risk. Gray Television is currently generating about -0.02 per unit of volatility. If you would invest 1,031 in Gray Television on August 27, 2024 and sell it today you would lose (594.00) from holding Gray Television or give up 57.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. Gray Television
Performance |
| Timeline |
| AMC Entertainment |
| Gray Television |
AMC Entertainment and Gray Television Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and Gray Television
The main advantage of trading using opposite AMC Entertainment and Gray Television positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Gray Television 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 Gray Television will offset losses from the drop in Gray Television's long position.| AMC Entertainment vs. ADTRAN Inc | AMC Entertainment vs. Belden Inc | AMC Entertainment vs. ADC Therapeutics SA | AMC Entertainment vs. Comtech Telecommunications Corp |
| Gray Television vs. E W Scripps | Gray Television vs. Saga Communications | Gray Television vs. iHeartMedia Class A | Gray Television vs. Cumulus Media Class |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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