Correlation Between Atlanta Braves and AMC Entertainment

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

By analyzing existing cross correlation between Atlanta Braves Holdings and AMC Entertainment Holdings, you can compare the effects of market volatilities on Atlanta Braves and AMC Entertainment 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 Atlanta Braves with a short position of AMC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlanta Braves and AMC Entertainment.

Diversification Opportunities for Atlanta Braves and AMC Entertainment

0.26

Correlation Coefficient

Atlanta Braves  AMC Entertainment

Modest diversification

The 3 months correlation between Atlanta and AMC is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Atlanta Braves Holdings and AMC Entertainment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Entertainment and Atlanta Braves 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 Atlanta Braves Holdings are associated (or correlated) with AMC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMC Entertainment has no effect on the direction of Atlanta Braves i.e., Atlanta Braves and AMC Entertainment go up and down completely randomly.

Pair Corralation between Atlanta Braves and AMC Entertainment

Assuming the 90 days horizon Atlanta Braves Holdings is expected to generate 0.16 times more return on investment than AMC Entertainment. However, Atlanta Braves Holdings is 6.07 times less risky than AMC Entertainment. It trades about -0.03 of its potential returns per unit of risk. AMC Entertainment Holdings is currently generating about -0.09 per unit of risk. If you would invest  3,794  in Atlanta Braves Holdings on January 24, 2024 and sell it today you would lose (34.00) from holding Atlanta Braves Holdings or give up 0.9% of portfolio value over 90 days.

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

Atlanta Braves Holdings  vs.  AMC Entertainment Holdings

Atlanta Braves Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlanta Braves Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

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 latest weak performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Atlanta Braves and AMC Entertainment

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

The idea behind Atlanta Braves Holdings and AMC Entertainment Holdings 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.