Correlation Between Rai Way and Lions Gate
Can any of the company-specific risk be diversified away by investing in both Rai Way and Lions Gate 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 Rai Way and Lions Gate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rai Way SpA and Lions Gate Entertainment, you can compare the effects of market volatilities on Rai Way and Lions Gate 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 Rai Way with a short position of Lions Gate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rai Way and Lions Gate.
Diversification Opportunities for Rai Way and Lions Gate
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rai and Lions is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Rai Way SpA and Lions Gate Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lions Gate Entertainment and Rai Way 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 Rai Way SpA are associated (or correlated) with Lions Gate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lions Gate Entertainment has no effect on the direction of Rai Way i.e., Rai Way and Lions Gate go up and down completely randomly.
Pair Corralation between Rai Way and Lions Gate
Assuming the 90 days horizon Rai Way SpA is expected to under-perform the Lions Gate. But the stock apears to be less risky and, when comparing its historical volatility, Rai Way SpA is 2.55 times less risky than Lions Gate. The stock trades about -0.07 of its potential returns per unit of risk. The Lions Gate Entertainment is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 640.00 in Lions Gate Entertainment on September 2, 2024 and sell it today you would earn a total of 55.00 from holding Lions Gate Entertainment or generate 8.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rai Way SpA vs. Lions Gate Entertainment
Performance |
| Timeline |
| Rai Way SpA |
| Lions Gate Entertainment |
Rai Way and Lions Gate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rai Way and Lions Gate
The main advantage of trading using opposite Rai Way and Lions Gate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rai Way position performs unexpectedly, Lions Gate 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 Lions Gate will offset losses from the drop in Lions Gate's long position.| Rai Way vs. Singapore Airlines Limited | Rai Way vs. NAKED WINES PLC | Rai Way vs. IMAGIN MEDICAL INC | Rai Way vs. International Consolidated Airlines |
| Lions Gate vs. Wizz Air Holdings | Lions Gate vs. DELTA AIR LINES | Lions Gate vs. FORWARD AIR P | Lions Gate vs. ALTAIR RES INC |
Check out your portfolio center.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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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