Correlation Between AMC Preferred and Warner Music
Can any of the company-specific risk be diversified away by investing in both AMC Preferred and Warner Music 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 Warner Music 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 Warner Music Group, you can compare the effects of market volatilities on AMC Preferred and Warner Music 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 Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Preferred and Warner Music.
Diversification Opportunities for AMC Preferred and Warner Music
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMC and Warner is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding AMC Preferred Units and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Music Group 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 Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of AMC Preferred i.e., AMC Preferred and Warner Music go up and down completely randomly.
Pair Corralation between AMC Preferred and Warner Music
If you would invest 3,186 in Warner Music Group on August 28, 2024 and sell it today you would earn a total of 19.00 from holding Warner Music Group or generate 0.6% 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. Warner Music Group
Performance |
| Timeline |
| AMC Preferred Units |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Warner Music Group |
AMC Preferred and Warner Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMC Preferred and Warner Music
The main advantage of trading using opposite AMC Preferred and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Preferred position performs unexpectedly, Warner Music 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 Music will offset losses from the drop in Warner Music's long position.| AMC Preferred vs. Netflix | AMC Preferred vs. Walt Disney | AMC Preferred vs. Roku Inc | AMC Preferred vs. Paramount Global Class |
| Warner Music vs. News Corp A | Warner Music vs. Marcus | Warner Music vs. Liberty Media | Warner Music vs. Fox Corp Class |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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