Correlation Between AMC Preferred and Warner Bros

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

Diversification Opportunities for AMC Preferred and Warner Bros

0.0

Correlation Coefficient

AMC Preferred  Warner Bros

Pay attention - limited upside

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

Pair Corralation between AMC Preferred and Warner Bros

If you would invest  1,062  in Warner Bros Discovery on December 1, 2024 and sell it today you would earn a total of  84.00  from holding Warner Bros Discovery or generate 7.91% return on investment over 90 days.

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

AMC Preferred Units  vs.  Warner Bros Discovery

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.

Warner Bros Discovery

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Warner Bros Discovery are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental drivers, Warner Bros may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with AMC Preferred and Warner Bros

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

The idea behind AMC Preferred Units and Warner Bros Discovery 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.