Correlation Between Endeavor Group and AMC Networks

Can any of the company-specific risk be diversified away by investing in both Endeavor Group 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 Endeavor Group and AMC Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Endeavor Group Holdings and AMC Networks, you can compare the effects of market volatilities on Endeavor Group 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 Endeavor Group with a short position of AMC Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavor Group and AMC Networks.

Diversification Opportunities for Endeavor Group and AMC Networks

-0.61

Correlation Coefficient

Endeavor Group  AMC Networks

Excellent diversification

The 3 months correlation between Endeavor and AMC is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Endeavor Group Holdings and AMC Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Networks and Endeavor Group 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 Endeavor Group Holdings 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 Endeavor Group i.e., Endeavor Group and AMC Networks go up and down completely randomly.

Pair Corralation between Endeavor Group and AMC Networks

Considering the 90-day investment horizon Endeavor Group Holdings is expected to under-perform the AMC Networks. But the stock apears to be less risky and, when comparing its historical volatility, Endeavor Group Holdings is 12.29 times less risky than AMC Networks. The stock trades about -0.04 of its potential returns per unit of risk. The AMC Networks is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,126  in AMC Networks on February 6, 2024 and sell it today you would earn a total of  59.00  from holding AMC Networks or generate 5.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Endeavor Group Holdings  vs.  AMC Networks

Endeavor Group Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavor Group Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Endeavor Group may actually be approaching a critical reversion point that can send shares even higher in June 2024.

AMC Networks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMC Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Endeavor Group and AMC Networks

The main advantage of trading using opposite Endeavor Group and AMC Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavor Group 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.

The idea behind Endeavor Group Holdings and AMC Networks pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.