Correlation Between AMC Entertainment and Saga Communications
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Saga Communications 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 Saga Communications 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 Saga Communications, you can compare the effects of market volatilities on AMC Entertainment and Saga Communications 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 Saga Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Saga Communications.
Diversification Opportunities for AMC Entertainment and Saga Communications
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AMC and Saga is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Saga Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga Communications 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 Saga Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga Communications has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Saga Communications go up and down completely randomly.
Pair Corralation between AMC Entertainment and Saga Communications
Considering the 90-day investment horizon AMC Entertainment Holdings is expected to under-perform the Saga Communications. In addition to that, AMC Entertainment is 3.88 times more volatile than Saga Communications. It trades about -0.04 of its total potential returns per unit of risk. Saga Communications is currently generating about -0.03 per unit of volatility. If you would invest 1,731 in Saga Communications on August 31, 2024 and sell it today you would lose (466.00) from holding Saga Communications or give up 26.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. Saga Communications
Performance |
| Timeline |
| AMC Entertainment |
| Saga Communications |
AMC Entertainment and Saga Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and Saga Communications
The main advantage of trading using opposite AMC Entertainment and Saga Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Saga Communications 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 Saga Communications will offset losses from the drop in Saga Communications' long position.| AMC Entertainment vs. Cinemark Holdings | AMC Entertainment vs. Roku Inc | AMC Entertainment vs. Netflix | AMC Entertainment vs. Paramount Global Class |
| Saga Communications vs. iHeartMedia Class A | Saga Communications vs. Beasley Broadcast Group | Saga Communications vs. Cumulus Media Class | Saga Communications vs. Mediaco Holding |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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