Correlation Between Fox Corp and AMC Networks

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

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

Diversification Opportunities for Fox Corp and AMC Networks

0.29

Correlation Coefficient

Fox Corp  AMC Networks

Modest diversification

The 3 months correlation between Fox and AMC is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fox Corp Class and AMC Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Networks and Fox Corp 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 Fox Corp Class are associated (or correlated) with AMC Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMC Networks has no effect on the direction of Fox Corp i.e., Fox Corp and AMC Networks go up and down completely randomly.

Pair Corralation between Fox Corp and AMC Networks

Given the investment horizon of 90 days Fox Corp Class is expected to generate 0.35 times more return on investment than AMC Networks. However, Fox Corp Class is 2.86 times less risky than AMC Networks. It trades about 0.17 of its potential returns per unit of risk. AMC Networks is currently generating about 0.0 per unit of risk. If you would invest  4,076  in Fox Corp Class on August 31, 2024 and sell it today you would earn a total of  595.00  from holding Fox Corp Class or generate 14.6% return on investment over 90 days.

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

Fox Corp Class  vs.  AMC Networks

Fox Corp Class

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fox Corp Class are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Fox Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

AMC Networks

Risk-Adjusted Performance

0 of 100

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 fairly strong fundamental indicators, AMC Networks is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fox Corp and AMC Networks

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

The idea behind Fox Corp Class and AMC Networks 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.