Correlation Between AMC Networks and Dave Busters
Can any of the company-specific risk be diversified away by investing in both AMC Networks and Dave Busters 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 Dave Busters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMC Networks and Dave Busters Entertainment, you can compare the effects of market volatilities on AMC Networks and Dave Busters 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 Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Networks and Dave Busters.
Diversification Opportunities for AMC Networks and Dave Busters
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMC and Dave is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding AMC Networks and Dave Busters Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dave Busters Enterta 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 Dave Busters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dave Busters Enterta has no effect on the direction of AMC Networks i.e., AMC Networks and Dave Busters go up and down completely randomly.
Pair Corralation between AMC Networks and Dave Busters
Given the investment horizon of 90 days AMC Networks is expected to generate 0.73 times more return on investment than Dave Busters. However, AMC Networks is 1.37 times less risky than Dave Busters. It trades about -0.13 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.23 per unit of risk. If you would invest 1,184 in AMC Networks on January 31, 2024 and sell it today you would lose (91.00) from holding AMC Networks or give up 7.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AMC Networks vs. Dave Busters Entertainment
Performance |
Timeline |
AMC Networks |
Dave Busters Enterta |
AMC Networks and Dave Busters Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AMC Networks and Dave Busters
The main advantage of trading using opposite AMC Networks and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMC Networks position performs unexpectedly, Dave Busters 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 Dave Busters will offset losses from the drop in Dave Busters' long position.AMC Networks vs. News Corp A | AMC Networks vs. News Corp B | AMC Networks vs. Paramount Global Class | AMC Networks vs. Liberty Media |
Dave Busters vs. Imax Corp | Dave Busters vs. Marcus | Dave Busters vs. AMC Networks | Dave Busters vs. Cinemark Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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