Correlation Between AMC Networks and IQIYI
Can any of the company-specific risk be diversified away by investing in both AMC Networks and IQIYI 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 Networks and IQIYI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMC Networks and iQIYI Inc, you can compare the effects of market volatilities on AMC Networks and IQIYI 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 Networks with a short position of IQIYI. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Networks and IQIYI.
Diversification Opportunities for AMC Networks and IQIYI
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMC and IQIYI is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding AMC Networks and iQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iQIYI Inc and AMC Networks 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 Networks are associated (or correlated) with IQIYI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iQIYI Inc has no effect on the direction of AMC Networks i.e., AMC Networks and IQIYI go up and down completely randomly.
Pair Corralation between AMC Networks and IQIYI
Given the investment horizon of 90 days AMC Networks is expected to generate 1.1 times more return on investment than IQIYI. However, AMC Networks is 1.1 times more volatile than iQIYI Inc. It trades about 0.16 of its potential returns per unit of risk. iQIYI Inc is currently generating about -0.38 per unit of risk. If you would invest 826.00 in AMC Networks on August 28, 2024 and sell it today you would earn a total of 104.00 from holding AMC Networks or generate 12.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMC Networks vs. iQIYI Inc
Performance |
| Timeline |
| AMC Networks |
| iQIYI Inc |
AMC Networks and IQIYI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Networks and IQIYI
The main advantage of trading using opposite AMC Networks and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Networks position performs unexpectedly, IQIYI 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 IQIYI will offset losses from the drop in IQIYI's long position.| AMC Networks vs. Walt Disney | AMC Networks vs. Roku Inc | AMC Networks vs. Netflix | AMC Networks vs. AMC Entertainment Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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