Correlation Between Lions Gate and Sinclair Broadcast
Can any of the company-specific risk be diversified away by investing in both Lions Gate and Sinclair Broadcast 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 Sinclair Broadcast 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 Sinclair Broadcast Group, you can compare the effects of market volatilities on Lions Gate and Sinclair Broadcast 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 Sinclair Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lions Gate and Sinclair Broadcast.
Diversification Opportunities for Lions Gate and Sinclair Broadcast
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lions and Sinclair is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lions Gate Entertainment and Sinclair Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinclair Broadcast 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 Sinclair Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinclair Broadcast has no effect on the direction of Lions Gate i.e., Lions Gate and Sinclair Broadcast go up and down completely randomly.
Pair Corralation between Lions Gate and Sinclair Broadcast
Assuming the 90 days horizon Lions Gate is expected to generate 8.76 times less return on investment than Sinclair Broadcast. But when comparing it to its historical volatility, Lions Gate Entertainment is 1.28 times less risky than Sinclair Broadcast. It trades about 0.0 of its potential returns per unit of risk. Sinclair Broadcast Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,690 in Sinclair Broadcast Group on November 1, 2024 and sell it today you would lose (226.00) from holding Sinclair Broadcast Group or give up 13.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lions Gate Entertainment vs. Sinclair Broadcast Group
Performance |
| Timeline |
| Lions Gate Entertainment |
| Sinclair Broadcast |
Lions Gate and Sinclair Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lions Gate and Sinclair Broadcast
The main advantage of trading using opposite Lions Gate and Sinclair Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lions Gate position performs unexpectedly, Sinclair Broadcast 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 Sinclair Broadcast will offset losses from the drop in Sinclair Broadcast'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 |
| Sinclair Broadcast vs. News Corp A | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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