Correlation Between Manchester United and AMC Entertainment
Can any of the company-specific risk be diversified away by investing in both Manchester United and AMC Entertainment 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 Manchester United and AMC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manchester United and AMC Entertainment Holdings, you can compare the effects of market volatilities on Manchester United and AMC Entertainment 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 Manchester United with a short position of AMC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manchester United and AMC Entertainment.
Diversification Opportunities for Manchester United and AMC Entertainment
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Manchester and AMC is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Manchester United and AMC Entertainment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Entertainment and Manchester United 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 Manchester United are associated (or correlated) with AMC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMC Entertainment has no effect on the direction of Manchester United i.e., Manchester United and AMC Entertainment go up and down completely randomly.
Pair Corralation between Manchester United and AMC Entertainment
Given the investment horizon of 90 days Manchester United is expected to generate 1.21 times less return on investment than AMC Entertainment. But when comparing it to its historical volatility, Manchester United is 1.62 times less risky than AMC Entertainment. It trades about 0.21 of its potential returns per unit of risk. AMC Entertainment Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 444.00 in AMC Entertainment Holdings on August 28, 2024 and sell it today you would earn a total of 42.00 from holding AMC Entertainment Holdings or generate 9.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manchester United vs. AMC Entertainment Holdings
Performance |
| Timeline |
| Manchester United |
| AMC Entertainment |
Manchester United and AMC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manchester United and AMC Entertainment
The main advantage of trading using opposite Manchester United and AMC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manchester United position performs unexpectedly, AMC Entertainment 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 Entertainment will offset losses from the drop in AMC Entertainment's long position.| Manchester United vs. Endeavor Group Holdings | Manchester United vs. Live Nation Entertainment | Manchester United vs. Warner Music Group | Manchester United vs. Liberty Media |
| AMC Entertainment vs. Cinemark Holdings | AMC Entertainment vs. Roku Inc | AMC Entertainment vs. Netflix | AMC Entertainment 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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