Correlation Between AMC Entertainment and Warner Bros
Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Warner Bros 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 Warner Bros 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 Warner Bros Discovery, you can compare the effects of market volatilities on AMC Entertainment and Warner Bros 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 Warner Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Warner Bros.
Diversification Opportunities for AMC Entertainment and Warner Bros
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMC and Warner is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Warner Bros Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Bros Discovery 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 Warner Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Bros Discovery has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Warner Bros go up and down completely randomly.
Pair Corralation between AMC Entertainment and Warner Bros
Considering the 90-day investment horizon AMC Entertainment Holdings is expected to under-perform the Warner Bros. In addition to that, AMC Entertainment is 2.27 times more volatile than Warner Bros Discovery. It trades about -0.04 of its total potential returns per unit of risk. Warner Bros Discovery is currently generating about 0.01 per unit of volatility. If you would invest 1,061 in Warner Bros Discovery on August 27, 2024 and sell it today you would lose (50.00) from holding Warner Bros Discovery or give up 4.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Entertainment Holdings vs. Warner Bros Discovery
Performance |
| Timeline |
| AMC Entertainment |
| Warner Bros Discovery |
AMC Entertainment and Warner Bros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Entertainment and Warner Bros
The main advantage of trading using opposite AMC Entertainment and Warner Bros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, Warner Bros 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 Warner Bros will offset losses from the drop in Warner Bros' long position.| AMC Entertainment vs. ADTRAN Inc | AMC Entertainment vs. Belden Inc | AMC Entertainment vs. ADC Therapeutics SA | AMC Entertainment vs. Comtech Telecommunications Corp |
| Warner Bros vs. Atari SA | Warner Bros vs. Victory Square Technologies | Warner Bros vs. Motorsport Gaming Us | Warner Bros vs. Alpha Esports Tech |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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