Correlation Between Lions Gate and Chicken Soup
Can any of the company-specific risk be diversified away by investing in both Lions Gate and Chicken Soup 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 Lions Gate and Chicken Soup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lions Gate Entertainment and Chicken Soup For, you can compare the effects of market volatilities on Lions Gate and Chicken Soup 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 Lions Gate with a short position of Chicken Soup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lions Gate and Chicken Soup.
Diversification Opportunities for Lions Gate and Chicken Soup
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lions and Chicken is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Lions Gate Entertainment and Chicken Soup For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicken Soup For and Lions Gate 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 Lions Gate Entertainment are associated (or correlated) with Chicken Soup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicken Soup For has no effect on the direction of Lions Gate i.e., Lions Gate and Chicken Soup go up and down completely randomly.
Pair Corralation between Lions Gate and Chicken Soup
Assuming the 90 days horizon Lions Gate Entertainment is expected to generate 0.11 times more return on investment than Chicken Soup. However, Lions Gate Entertainment is 8.7 times less risky than Chicken Soup. It trades about 0.03 of its potential returns per unit of risk. Chicken Soup For is currently generating about -0.41 per unit of risk. If you would invest 783.00 in Lions Gate Entertainment on September 1, 2024 and sell it today you would earn a total of 41.00 from holding Lions Gate Entertainment or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 19.05% |
| Values | Daily Returns |
Lions Gate Entertainment vs. Chicken Soup For
Performance |
| Timeline |
| Lions Gate Entertainment |
| Chicken Soup For |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lions Gate and Chicken Soup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lions Gate and Chicken Soup
The main advantage of trading using opposite Lions Gate and Chicken Soup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lions Gate position performs unexpectedly, Chicken Soup 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 Chicken Soup will offset losses from the drop in Chicken Soup's long position.| Lions Gate vs. Lions Gate Entertainment | Lions Gate vs. AMC Networks | Lions Gate vs. Altice USA | Lions Gate vs. Liberty Broadband Srs |
| Chicken Soup vs. LiveOne | Chicken Soup vs. Sinclair Broadcast Group | Chicken Soup vs. Fox Corp Class | Chicken Soup vs. Lions Gate Entertainment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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