Correlation Between AMC Preferred and Roku
Can any of the company-specific risk be diversified away by investing in both AMC Preferred and Roku 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 Roku 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 Roku Inc, you can compare the effects of market volatilities on AMC Preferred and Roku 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 Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Preferred and Roku.
Diversification Opportunities for AMC Preferred and Roku
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AMC and Roku is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding AMC Preferred Units and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc 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 Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of AMC Preferred i.e., AMC Preferred and Roku go up and down completely randomly.
Pair Corralation between AMC Preferred and Roku
Considering the 90-day investment horizon AMC Preferred Units is expected to generate 2.22 times more return on investment than Roku. However, AMC Preferred is 2.22 times more volatile than Roku Inc. It trades about 0.09 of its potential returns per unit of risk. Roku Inc is currently generating about 0.03 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 | Very Weak |
| Accuracy | 31.65% |
| Values | Daily Returns |
AMC Preferred Units vs. Roku Inc
Performance |
| Timeline |
| AMC Preferred Units |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Roku Inc |
AMC Preferred and Roku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Preferred and Roku
The main advantage of trading using opposite AMC Preferred and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Preferred position performs unexpectedly, Roku 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 Roku will offset losses from the drop in Roku's long position.| AMC Preferred vs. Netflix | AMC Preferred vs. Walt Disney | AMC Preferred vs. Roku Inc | AMC Preferred vs. Paramount Global Class |
| Roku vs. Walt Disney | Roku vs. AMC Entertainment Holdings | Roku vs. Paramount Global Class | Roku 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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