Correlation Between AMC Preferred and Liberty Media
Can any of the company-specific risk be diversified away by investing in both AMC Preferred and Liberty Media 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 Liberty Media 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 Liberty Media, you can compare the effects of market volatilities on AMC Preferred and Liberty Media 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 Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Preferred and Liberty Media.
Diversification Opportunities for AMC Preferred and Liberty Media
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMC and Liberty is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding AMC Preferred Units and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media 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 Liberty Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Media has no effect on the direction of AMC Preferred i.e., AMC Preferred and Liberty Media go up and down completely randomly.
Pair Corralation between AMC Preferred and Liberty Media
If you would invest 7,445 in Liberty Media on August 28, 2024 and sell it today you would earn a total of 629.00 from holding Liberty Media or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
AMC Preferred Units vs. Liberty Media
Performance |
| Timeline |
| AMC Preferred Units |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Liberty Media |
AMC Preferred and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Preferred and Liberty Media
The main advantage of trading using opposite AMC Preferred and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Preferred position performs unexpectedly, Liberty Media 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 Liberty Media will offset losses from the drop in Liberty Media's long position.| AMC Preferred vs. Netflix | AMC Preferred vs. Walt Disney | AMC Preferred vs. Roku Inc | AMC Preferred vs. Paramount Global Class |
| Liberty Media vs. Atlanta Braves Holdings, | Liberty Media vs. Madison Square Garden | Liberty Media vs. News Corp B | Liberty Media vs. News Corp A |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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