Correlation Between AMC Entertainment and Grupo Televisa

Can any of the company-specific risk be diversified away by investing in both AMC Entertainment and Grupo Televisa 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 Grupo Televisa 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 Grupo Televisa SAB, you can compare the effects of market volatilities on AMC Entertainment and Grupo Televisa 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 Grupo Televisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMC Entertainment and Grupo Televisa.

Diversification Opportunities for AMC Entertainment and Grupo Televisa

-0.19

Correlation Coefficient

AMC Entertainment  Grupo Televisa

Good diversification

The 3 months correlation between AMC and Grupo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding AMC Entertainment Holdings and Grupo Televisa SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Televisa SAB 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 Grupo Televisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Televisa SAB has no effect on the direction of AMC Entertainment i.e., AMC Entertainment and Grupo Televisa go up and down completely randomly.

Pair Corralation between AMC Entertainment and Grupo Televisa

Considering the 90-day investment horizon AMC Entertainment Holdings is expected to under-perform the Grupo Televisa. In addition to that, AMC Entertainment is 2.01 times more volatile than Grupo Televisa SAB. It trades about -0.26 of its total potential returns per unit of risk. Grupo Televisa SAB is currently generating about 0.21 per unit of volatility. If you would invest  57.00  in Grupo Televisa SAB on January 19, 2024 and sell it today you would earn a total of  8.00  from holding Grupo Televisa SAB or generate 14.04% return on investment over 90 days.

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

AMC Entertainment Holdings  vs.  Grupo Televisa SAB

AMC Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

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 uncertain performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Grupo Televisa SAB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Televisa SAB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Grupo Televisa reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMC Entertainment and Grupo Televisa

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

The idea behind AMC Entertainment Holdings and Grupo Televisa SAB 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.