Correlation Between AMC Preferred and Roku

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

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

Diversification Opportunities for AMC Preferred and Roku

0.0

Correlation Coefficient

AMC Preferred  Roku

Pay attention - limited upside

The 3 months correlation between AMC and Roku is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AMC Preferred Units and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc and AMC Preferred 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 Preferred Units are associated (or correlated) with Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of AMC Preferred i.e., AMC Preferred and Roku go up and down completely randomly.

Pair Corralation between AMC Preferred and Roku

If you would invest  7,880  in Roku Inc on December 23, 2024 and sell it today you would lose (51.00) from holding Roku Inc or give up 0.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

AMC Preferred Units  vs.  Roku Inc

AMC Preferred Units

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMC Preferred Units has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, AMC Preferred is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Roku Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Roku Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking signals, Roku is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AMC Preferred and Roku

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

The idea behind AMC Preferred Units and Roku Inc 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.