Correlation Between AMC Preferred and Disney
Can any of the company-specific risk be diversified away by investing in both AMC Preferred and Disney 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 Preferred and Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMC Preferred Units and Walt Disney, you can compare the effects of market volatilities on AMC Preferred and Disney 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 Preferred with a short position of Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Preferred and Disney.
Diversification Opportunities for AMC Preferred and Disney
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMC and Disney is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding AMC Preferred Units and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and AMC Preferred 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 Preferred Units are associated (or correlated) with Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of AMC Preferred i.e., AMC Preferred and Disney go up and down completely randomly.
Pair Corralation between AMC Preferred and Disney
Considering the 90-day investment horizon AMC Preferred Units is expected to generate 5.28 times more return on investment than Disney. However, AMC Preferred is 5.28 times more volatile than Walt Disney. It trades about 0.09 of its potential returns per unit of risk. Walt Disney is currently generating about 0.04 per unit of risk. If you would invest 89.00 in AMC Preferred Units on August 27, 2024 and sell it today you would earn a total of 91.00 from holding AMC Preferred Units or generate 102.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.65% |
| Values | Daily Returns |
AMC Preferred Units vs. Walt Disney
Performance |
| Timeline |
| AMC Preferred Units |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Walt Disney |
AMC Preferred and Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Preferred and Disney
The main advantage of trading using opposite AMC Preferred and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Preferred position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney's long position.| AMC Preferred vs. Netflix | AMC Preferred vs. Walt Disney | AMC Preferred vs. Roku Inc | AMC Preferred vs. Paramount Global Class |
| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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