Correlation Between AMC Entertainment and DISH Network

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Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and DISH Network 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 Entertainment and DISH Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMC Entertainment Holdings and DISH Network, you can compare the effects of market volatilities on AMC Entertainment and DISH Network 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 Entertainment with a short position of DISH Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and DISH Network.

Diversification Opportunities for AMC Entertainment and DISH Network

0.89
  Correlation Coefficient

Very poor diversification

The 18 months correlation between AMC and DISH is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and DISH Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISH Network and AMC Entertainment 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 Entertainment Holdings are associated (or correlated) with DISH Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISH Network has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and DISH Network go up and down completely randomly.

Pair Corralation between AMC Entertainment and DISH Network

If you would invest  577.00  in DISH Network on December 29, 2023 and sell it today you would earn a total of  0.00  from holding DISH Network or generate 0.0% return on investment over 90 days.
Time Period18 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy4.55%
ValuesDaily Returns

AMC Entertainment Holdings  vs.  DISH Network

 Performance 
       Timeline  
AMC Entertainment 

Risk-Adjusted Performance

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Over the last 90 days AMC Entertainment Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
DISH Network 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days DISH Network has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

AMC Entertainment and DISH Network Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AMC Entertainment and DISH Network

The main advantage of trading using opposite AMC Entertainment and DISH Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Entertainment position performs unexpectedly, DISH Network 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 DISH Network will offset losses from the drop in DISH Network's long position.
The idea behind AMC Entertainment Holdings and DISH Network 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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