Correlation Between AMC Networks and Cardlytics

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

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

Diversification Opportunities for AMC Networks and Cardlytics

-0.61

Correlation Coefficient

AMC Networks  Cardlytics

Excellent diversification

The 3 months correlation between AMC and Cardlytics is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding AMC Networks and Cardlytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardlytics 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 Cardlytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardlytics has no effect on the direction of AMC Networks i.e., AMC Networks and Cardlytics go up and down completely randomly.

Pair Corralation between AMC Networks and Cardlytics

Given the investment horizon of 90 days AMC Networks is expected to under-perform the Cardlytics. But the stock apears to be less risky and, when comparing its historical volatility, AMC Networks is 2.58 times less risky than Cardlytics. The stock trades about -0.01 of its potential returns per unit of risk. The Cardlytics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  625.00  in Cardlytics on February 7, 2024 and sell it today you would earn a total of  895.00  from holding Cardlytics or generate 143.2% return on investment over 90 days.

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

AMC Networks  vs.  Cardlytics

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

Cardlytics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cardlytics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Cardlytics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMC Networks and Cardlytics

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

The idea behind AMC Networks and Cardlytics 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.