Correlation Between Lions Gate and Roku
Can any of the company-specific risk be diversified away by investing in both Lions Gate and Roku 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 Roku 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 Roku Inc, you can compare the effects of market volatilities on Lions Gate and Roku 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 Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lions Gate and Roku.
Diversification Opportunities for Lions Gate and Roku
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lions and Roku is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lions Gate Entertainment and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc 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 Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of Lions Gate i.e., Lions Gate and Roku go up and down completely randomly.
Pair Corralation between Lions Gate and Roku
Assuming the 90 days horizon Lions Gate Entertainment is expected to under-perform the Roku. But the stock apears to be less risky and, when comparing its historical volatility, Lions Gate Entertainment is 1.17 times less risky than Roku. The stock trades about -0.09 of its potential returns per unit of risk. The Roku Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,799 in Roku Inc on November 8, 2024 and sell it today you would earn a total of 366.00 from holding Roku Inc or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lions Gate Entertainment vs. Roku Inc
Performance |
| Timeline |
| Lions Gate Entertainment |
| Roku Inc |
Lions Gate and Roku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lions Gate and Roku
The main advantage of trading using opposite Lions Gate and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lions Gate position performs unexpectedly, Roku 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 Roku will offset losses from the drop in Roku'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 |
| Roku vs. Walt Disney | Roku vs. AMC Entertainment Holdings | Roku vs. Paramount Global Class | Roku vs. Warner Bros Discovery |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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