Correlation Between Live Nation and AMC Preferred
Can any of the company-specific risk be diversified away by investing in both Live Nation and AMC Preferred 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 Live Nation and AMC Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Nation Entertainment and AMC Preferred Units, you can compare the effects of market volatilities on Live Nation and AMC Preferred 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 Live Nation with a short position of AMC Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Nation and AMC Preferred.
Diversification Opportunities for Live Nation and AMC Preferred
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Live and AMC is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Live Nation Entertainment and AMC Preferred Units in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Preferred Units and Live Nation 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 Live Nation Entertainment are associated (or correlated) with AMC Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMC Preferred Units has no effect on the direction of Live Nation i.e., Live Nation and AMC Preferred go up and down completely randomly.
Pair Corralation between Live Nation and AMC Preferred
If you would invest 11,843 in Live Nation Entertainment on August 28, 2024 and sell it today you would earn a total of 2,211 from holding Live Nation Entertainment or generate 18.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Live Nation Entertainment vs. AMC Preferred Units
Performance |
| Timeline |
| Live Nation Entertainment |
| AMC Preferred Units |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Live Nation and AMC Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Nation and AMC Preferred
The main advantage of trading using opposite Live Nation and AMC Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Nation position performs unexpectedly, AMC Preferred 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 AMC Preferred will offset losses from the drop in AMC Preferred's long position.| Live Nation vs. Liberty Media | Live Nation vs. Atlanta Braves Holdings, | Live Nation vs. News Corp B | Live Nation vs. News Corp A |
| AMC Preferred vs. Netflix | AMC Preferred vs. Walt Disney | AMC Preferred vs. Roku Inc | AMC Preferred vs. Paramount Global 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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