Correlation Between AMC Entertainment and Live Nation
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Live Nation 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 Live Nation 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 Live Nation Entertainment, you can compare the effects of market volatilities on AMC Entertainment and Live Nation 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 Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Live Nation.
Diversification Opportunities for AMC Entertainment and Live Nation
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMC and Live is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment 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 Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Live Nation go up and down completely randomly.
Pair Corralation between AMC Entertainment and Live Nation
Considering the 90-day investment horizon AMC Entertainment is expected to generate 1.88 times less return on investment than Live Nation. In addition to that, AMC Entertainment is 1.54 times more volatile than Live Nation Entertainment. It trades about 0.12 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.36 per unit of volatility. If you would invest 11,881 in Live Nation Entertainment on August 30, 2024 and sell it today you would earn a total of 2,092 from holding Live Nation Entertainment or generate 17.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. Live Nation Entertainment
Performance |
| Timeline |
| AMC Entertainment |
| Live Nation Entertainment |
AMC Entertainment and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and Live Nation
The main advantage of trading using opposite AMC Entertainment and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Live Nation 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 Live Nation will offset losses from the drop in Live Nation's long position.| AMC Entertainment vs. Cinemark Holdings | AMC Entertainment vs. Roku Inc | AMC Entertainment vs. Netflix | AMC Entertainment vs. Paramount Global Class |
| Live Nation vs. Liberty Media | Live Nation vs. Atlanta Braves Holdings, | Live Nation vs. News Corp B | Live Nation vs. News Corp A |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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