Correlation Between Lions Gate and Imax Corp
Can any of the company-specific risk be diversified away by investing in both Lions Gate and Imax Corp 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 Imax Corp 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 Imax Corp, you can compare the effects of market volatilities on Lions Gate and Imax Corp 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 Imax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lions Gate and Imax Corp.
Diversification Opportunities for Lions Gate and Imax Corp
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lions and Imax is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lions Gate Entertainment and Imax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imax Corp 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 Imax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imax Corp has no effect on the direction of Lions Gate i.e., Lions Gate and Imax Corp go up and down completely randomly.
Pair Corralation between Lions Gate and Imax Corp
Assuming the 90 days horizon Lions Gate is expected to generate 4.8 times less return on investment than Imax Corp. In addition to that, Lions Gate is 1.29 times more volatile than Imax Corp. It trades about 0.03 of its total potential returns per unit of risk. Imax Corp is currently generating about 0.18 per unit of volatility. If you would invest 1,616 in Imax Corp on September 1, 2024 and sell it today you would earn a total of 1,016 from holding Imax Corp or generate 62.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lions Gate Entertainment vs. Imax Corp
Performance |
| Timeline |
| Lions Gate Entertainment |
| Imax Corp |
Lions Gate and Imax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lions Gate and Imax Corp
The main advantage of trading using opposite Lions Gate and Imax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lions Gate position performs unexpectedly, Imax Corp 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 Imax Corp will offset losses from the drop in Imax Corp'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 |
| Imax Corp vs. ADTRAN Inc | Imax Corp vs. Belden Inc | Imax Corp vs. ADC Therapeutics SA | Imax Corp vs. Comtech Telecommunications 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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