Correlation Between DICKS Sporting and Lions Gate
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting 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 DICKS Sporting and Lions Gate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DICKS Sporting Goods and Lions Gate Entertainment, you can compare the effects of market volatilities on DICKS Sporting 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 DICKS Sporting with a short position of Lions Gate. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and Lions Gate.
Diversification Opportunities for DICKS Sporting and Lions Gate
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DICKS and Lions is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods 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 DICKS Sporting 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 DICKS Sporting Goods 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 DICKS Sporting i.e., DICKS Sporting and Lions Gate go up and down completely randomly.
Pair Corralation between DICKS Sporting and Lions Gate
Assuming the 90 days horizon DICKS Sporting is expected to generate 1.57 times less return on investment than Lions Gate. In addition to that, DICKS Sporting is 1.04 times more volatile than Lions Gate Entertainment. It trades about 0.07 of its total potential returns per unit of risk. Lions Gate Entertainment is currently generating about 0.12 per unit of volatility. If you would invest 600.00 in Lions Gate Entertainment on September 12, 2024 and sell it today you would earn a total of 105.00 from holding Lions Gate Entertainment or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
DICKS Sporting Goods vs. Lions Gate Entertainment
Performance |
| Timeline |
| DICKS Sporting Goods |
| Lions Gate Entertainment |
DICKS Sporting and Lions Gate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and Lions Gate
The main advantage of trading using opposite DICKS Sporting and Lions Gate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting 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.| DICKS Sporting vs. Superior Plus Corp | DICKS Sporting vs. SIVERS SEMICONDUCTORS AB | DICKS Sporting vs. NorAm Drilling AS | DICKS Sporting vs. Norsk Hydro ASA |
| Lions Gate vs. Citic Telecom International | Lions Gate vs. CITIC Telecom International | Lions Gate vs. Iridium Communications | Lions Gate vs. China Communications Services |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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