Correlation Between Lions Gate and Nexstar Broadcasting
Can any of the company-specific risk be diversified away by investing in both Lions Gate and Nexstar Broadcasting 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 Nexstar Broadcasting 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 Nexstar Broadcasting Group, you can compare the effects of market volatilities on Lions Gate and Nexstar Broadcasting 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 Nexstar Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lions Gate and Nexstar Broadcasting.
Diversification Opportunities for Lions Gate and Nexstar Broadcasting
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lions and Nexstar is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lions Gate Entertainment and Nexstar Broadcasting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstar Broadcasting 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 Nexstar Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstar Broadcasting has no effect on the direction of Lions Gate i.e., Lions Gate and Nexstar Broadcasting go up and down completely randomly.
Pair Corralation between Lions Gate and Nexstar Broadcasting
Assuming the 90 days horizon Lions Gate Entertainment is expected to generate 1.58 times more return on investment than Nexstar Broadcasting. However, Lions Gate is 1.58 times more volatile than Nexstar Broadcasting Group. It trades about 0.0 of its potential returns per unit of risk. Nexstar Broadcasting Group is currently generating about 0.0 per unit of risk. If you would invest 915.00 in Lions Gate Entertainment on November 8, 2024 and sell it today you would lose (101.00) from holding Lions Gate Entertainment or give up 11.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lions Gate Entertainment vs. Nexstar Broadcasting Group
Performance |
| Timeline |
| Lions Gate Entertainment |
| Nexstar Broadcasting |
Lions Gate and Nexstar Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lions Gate and Nexstar Broadcasting
The main advantage of trading using opposite Lions Gate and Nexstar Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lions Gate position performs unexpectedly, Nexstar Broadcasting 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 Nexstar Broadcasting will offset losses from the drop in Nexstar Broadcasting'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 |
| Nexstar Broadcasting vs. News Corp B | Nexstar Broadcasting vs. Fox Corp Class | Nexstar Broadcasting vs. Liberty Media | Nexstar Broadcasting vs. AMC Networks |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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