Correlation Between News Corp and AMC Networks
Can any of the company-specific risk be diversified away by investing in both News Corp and AMC Networks 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 News Corp and AMC Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between News Corp B and AMC Networks, you can compare the effects of market volatilities on News Corp and AMC Networks 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 News Corp with a short position of AMC Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of News Corp and AMC Networks.
Diversification Opportunities for News Corp and AMC Networks
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between News and AMC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding News Corp B and AMC Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Networks and News Corp 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 News Corp B are associated (or correlated) with AMC Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMC Networks has no effect on the direction of News Corp i.e., News Corp and AMC Networks go up and down completely randomly.
Pair Corralation between News Corp and AMC Networks
Considering the 90-day investment horizon News Corp B is expected to generate 0.31 times more return on investment than AMC Networks. However, News Corp B is 3.23 times less risky than AMC Networks. It trades about -0.01 of its potential returns per unit of risk. AMC Networks is currently generating about -0.06 per unit of risk. If you would invest 3,046 in News Corp B on October 20, 2024 and sell it today you would lose (6.00) from holding News Corp B or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
News Corp B vs. AMC Networks
Performance |
| Timeline |
| News Corp B |
| AMC Networks |
News Corp and AMC Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with News Corp and AMC Networks
The main advantage of trading using opposite News Corp and AMC Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News Corp position performs unexpectedly, AMC Networks 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 Networks will offset losses from the drop in AMC Networks' long position.| News Corp vs. Fox Corp Class | News Corp vs. Liberty Media | News Corp vs. Marcus | News Corp vs. Madison Square Garden |
| AMC Networks vs. Nexstar Broadcasting Group | AMC Networks vs. News Corp B | AMC Networks vs. Fox Corp Class | AMC Networks vs. Liberty Media |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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