Correlation Between AMC Networks and BlueScope Steel

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

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

Diversification Opportunities for AMC Networks and BlueScope Steel

-0.37

Correlation Coefficient

AMC Networks  BlueScope Steel

Very good diversification

The 3 months correlation between AMC and BlueScope is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding AMC Networks and BlueScope Steel Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueScope Steel 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 BlueScope Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlueScope Steel has no effect on the direction of AMC Networks i.e., AMC Networks and BlueScope Steel go up and down completely randomly.

Pair Corralation between AMC Networks and BlueScope Steel

Given the investment horizon of 90 days AMC Networks is expected to generate 1.04 times more return on investment than BlueScope Steel. However, AMC Networks is 1.04 times more volatile than BlueScope Steel Ltd. It trades about 0.02 of its potential returns per unit of risk. BlueScope Steel Ltd is currently generating about 0.0 per unit of risk. If you would invest  934.00  in AMC Networks on September 27, 2024 and sell it today you would earn a total of  4.00  from holding AMC Networks or generate 0.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

AMC Networks  vs.  BlueScope Steel Ltd

AMC Networks

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AMC Networks are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, AMC Networks showed solid returns over the last few months and may actually be approaching a breakup point.

BlueScope Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlueScope Steel Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, BlueScope Steel is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AMC Networks and BlueScope Steel

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

The idea behind AMC Networks and BlueScope Steel Ltd 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.