Correlation Between AMC Networks and Sinclair Broadcast

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

Diversification Opportunities for AMC Networks and Sinclair Broadcast

0.06

Correlation Coefficient

AMC Networks  Sinclair Broadcast

Significant diversification

The 3 months correlation between AMC and Sinclair is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding AMC Networks and Sinclair Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinclair 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 Sinclair Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinclair Broadcast has no effect on the direction of AMC Networks i.e., AMC Networks and Sinclair Broadcast go up and down completely randomly.

Pair Corralation between AMC Networks and Sinclair Broadcast

Given the investment horizon of 90 days AMC Networks is expected to under-perform the Sinclair Broadcast. In addition to that, AMC Networks is 1.2 times more volatile than Sinclair Broadcast Group. It trades about -0.15 of its total potential returns per unit of risk. Sinclair Broadcast Group is currently generating about 0.03 per unit of volatility. If you would invest  1,536  in Sinclair Broadcast Group on December 28, 2024 and sell it today you would earn a total of  31.00  from holding Sinclair Broadcast Group or generate 2.02% return on investment over 90 days.

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

AMC Networks  vs.  Sinclair Broadcast Group

AMC Networks

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sinclair Broadcast

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sinclair Broadcast Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Sinclair Broadcast is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with AMC Networks and Sinclair Broadcast

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

The idea behind AMC Networks and Sinclair 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.