Correlation Between AMC Networks and Marcus

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

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

Diversification Opportunities for AMC Networks and Marcus

0.21

Correlation Coefficient

AMC Networks  Marcus

Modest diversification

The 3 months correlation between AMC and Marcus is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding AMC Networks and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus 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 Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of AMC Networks i.e., AMC Networks and Marcus go up and down completely randomly.

Pair Corralation between AMC Networks and Marcus

Given the investment horizon of 90 days AMC Networks is expected to generate 2.02 times less return on investment than Marcus. In addition to that, AMC Networks is 1.23 times more volatile than Marcus. It trades about 0.17 of its total potential returns per unit of risk. Marcus is currently generating about 0.42 per unit of volatility. If you would invest  1,712  in Marcus on August 31, 2024 and sell it today you would earn a total of  536.00  from holding Marcus or generate 31.31% return on investment over 90 days.

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

AMC Networks  vs.  Marcus

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.

Marcus

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Marcus are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Marcus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMC Networks and Marcus

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

The idea behind AMC Networks and Marcus 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 Stocks Directory module to find actively traded stocks across global markets.