Correlation Between AMC Networks and Live Nation
Can any of the company-specific risk be diversified away by investing in both AMC Networks and Live Nation 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 Networks and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMC Networks and Live Nation Entertainment, you can compare the effects of market volatilities on AMC Networks and Live Nation 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 Networks with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Networks and Live Nation.
Diversification Opportunities for AMC Networks and Live Nation
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMC and Live is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding AMC Networks and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment and AMC Networks 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 Networks are associated (or correlated) with Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of AMC Networks i.e., AMC Networks and Live Nation go up and down completely randomly.
Pair Corralation between AMC Networks and Live Nation
Given the investment horizon of 90 days AMC Networks is expected to under-perform the Live Nation. In addition to that, AMC Networks is 2.06 times more volatile than Live Nation Entertainment. It trades about -0.01 of its total potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.05 per unit of volatility. If you would invest 8,731 in Live Nation Entertainment on February 6, 2024 and sell it today you would earn a total of 819.00 from holding Live Nation Entertainment or generate 9.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
AMC Networks vs. Live Nation Entertainment
Performance |
Timeline |
AMC Networks |
Live Nation Entertainment |
AMC Networks and Live Nation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AMC Networks and Live Nation
The main advantage of trading using opposite AMC Networks and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Networks position performs unexpectedly, Live Nation 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 Live Nation will offset losses from the drop in Live Nation's long position.AMC Networks vs. Marchex | AMC Networks vs. Direct Digital Holdings | AMC Networks vs. Cimpress NV | AMC Networks vs. Emerald Expositions Events |
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 CEOs Directory module to screen CEOs from public companies around the world.
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