Correlation Between East West and Lionsgate Studios
Can any of the company-specific risk be diversified away by investing in both East West and Lionsgate Studios 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 East West and Lionsgate Studios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East West Bancorp and Lionsgate Studios Corp, you can compare the effects of market volatilities on East West and Lionsgate Studios 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 East West with a short position of Lionsgate Studios. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and Lionsgate Studios.
Diversification Opportunities for East West and Lionsgate Studios
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between East and Lionsgate is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding East West Bancorp and Lionsgate Studios Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionsgate Studios Corp and East West 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 East West Bancorp are associated (or correlated) with Lionsgate Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionsgate Studios Corp has no effect on the direction of East West i.e., East West and Lionsgate Studios go up and down completely randomly.
Pair Corralation between East West and Lionsgate Studios
Given the investment horizon of 90 days East West Bancorp is expected to generate 0.54 times more return on investment than Lionsgate Studios. However, East West Bancorp is 1.85 times less risky than Lionsgate Studios. It trades about 0.3 of its potential returns per unit of risk. Lionsgate Studios Corp is currently generating about -0.15 per unit of risk. If you would invest 9,447 in East West Bancorp on November 3, 2024 and sell it today you would earn a total of 850.00 from holding East West Bancorp or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East West Bancorp vs. Lionsgate Studios Corp
Performance |
| Timeline |
| East West Bancorp |
| Lionsgate Studios Corp |
East West and Lionsgate Studios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and Lionsgate Studios
The main advantage of trading using opposite East West and Lionsgate Studios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West position performs unexpectedly, Lionsgate Studios 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 Lionsgate Studios will offset losses from the drop in Lionsgate Studios' long position.| East West vs. Barclays PLC ADR | East West vs. UBS Group AG | East West vs. ING Group NV | East West vs. Citigroup |
| Lionsgate Studios vs. Hudson Acquisition I | Lionsgate Studios vs. Marblegate Acquisition Corp | Lionsgate Studios vs. Alpha One | Lionsgate Studios vs. Manaris Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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