Correlation Between AMC Networks and Beasley Broadcast

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

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

Diversification Opportunities for AMC Networks and Beasley Broadcast

0.81

Correlation Coefficient

AMC Networks  Beasley Broadcast

Very poor diversification

The 3 months correlation between AMC and Beasley is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AMC Networks and Beasley Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beasley Broadcast 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 Beasley Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beasley Broadcast has no effect on the direction of AMC Networks i.e., AMC Networks and Beasley Broadcast go up and down completely randomly.

Pair Corralation between AMC Networks and Beasley Broadcast

Given the investment horizon of 90 days AMC Networks is expected to under-perform the Beasley Broadcast. But the stock apears to be less risky and, when comparing its historical volatility, AMC Networks is 1.43 times less risky than Beasley Broadcast. The stock trades about -0.18 of its potential returns per unit of risk. The Beasley Broadcast Group is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Beasley Broadcast Group on January 20, 2024 and sell it today you would lose (17.00) from holding Beasley Broadcast Group or give up 18.89% of portfolio value over 90 days.

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

AMC Networks  vs.  Beasley Broadcast Group

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 fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Beasley Broadcast

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beasley Broadcast Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with AMC Networks and Beasley Broadcast

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

The idea behind AMC Networks and Beasley Broadcast Group 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.