Correlation Between AMC Entertainment and News Corp
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and News Corp 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 News Corp 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 News Corp A, you can compare the effects of market volatilities on AMC Entertainment and News Corp 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 News Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and News Corp.
Diversification Opportunities for AMC Entertainment and News Corp
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between AMC and News is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and News Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News Corp A 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 News Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News Corp A has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and News Corp go up and down completely randomly.
Pair Corralation between AMC Entertainment and News Corp
Considering the 90-day investment horizon AMC Entertainment is expected to generate 2.79 times less return on investment than News Corp. In addition to that, AMC Entertainment is 5.43 times more volatile than News Corp A. It trades about 0.01 of its total potential returns per unit of risk. News Corp A is currently generating about 0.1 per unit of volatility. If you would invest 2,198 in News Corp A on August 27, 2024 and sell it today you would earn a total of 751.00 from holding News Corp A or generate 34.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. News Corp A
Performance |
| Timeline |
| AMC Entertainment |
| News Corp A |
AMC Entertainment and News Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and News Corp
The main advantage of trading using opposite AMC Entertainment and News Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, News Corp 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 News Corp will offset losses from the drop in News Corp'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 |
| News Corp vs. Marcus | News Corp vs. Liberty Media | News Corp vs. Warner Music Group | News Corp vs. Fox Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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