Correlation Between AMC Networks and Manchester United

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

By analyzing existing cross correlation between AMC Networks and Manchester United, you can compare the effects of market volatilities on AMC Networks and Manchester United 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 Manchester United. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Networks and Manchester United.

Diversification Opportunities for AMC Networks and Manchester United

0.64

Correlation Coefficient

AMC Networks  Manchester United

Poor diversification

The 3 months correlation between AMC and Manchester is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding AMC Networks and Manchester United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manchester United 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 Manchester United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manchester United has no effect on the direction of AMC Networks i.e., AMC Networks and Manchester United go up and down completely randomly.

Pair Corralation between AMC Networks and Manchester United

Given the investment horizon of 90 days AMC Networks is expected to generate 2.01 times more return on investment than Manchester United. However, AMC Networks is 2.01 times more volatile than Manchester United. It trades about 0.17 of its potential returns per unit of risk. Manchester United is currently generating about 0.16 per unit of risk. If you would invest  827.00  in AMC Networks on August 31, 2024 and sell it today you would earn a total of  116.00  from holding AMC Networks or generate 14.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

AMC Networks  vs.  Manchester United

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 fairly strong fundamental indicators, AMC Networks is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Manchester United

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manchester United has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Manchester United is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AMC Networks and Manchester United

The main advantage of trading using opposite AMC Networks and Manchester United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Networks position performs unexpectedly, Manchester United 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 Manchester United will offset losses from the drop in Manchester United's long position.

The idea behind AMC Networks and Manchester United 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.