Correlation Between Lions Gate and LION ONE
Can any of the company-specific risk be diversified away by investing in both Lions Gate and LION ONE 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 LION ONE 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 LION ONE METALS, you can compare the effects of market volatilities on Lions Gate and LION ONE 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 LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lions Gate and LION ONE.
Diversification Opportunities for Lions Gate and LION ONE
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lions and LION is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lions Gate Entertainment and LION ONE METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LION ONE METALS 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 LION ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LION ONE METALS has no effect on the direction of Lions Gate i.e., Lions Gate and LION ONE go up and down completely randomly.
Pair Corralation between Lions Gate and LION ONE
Assuming the 90 days trading horizon Lions Gate Entertainment is expected to generate 0.82 times more return on investment than LION ONE. However, Lions Gate Entertainment is 1.22 times less risky than LION ONE. It trades about 0.15 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.16 per unit of risk. If you would invest 635.00 in Lions Gate Entertainment on September 4, 2024 and sell it today you would earn a total of 60.00 from holding Lions Gate Entertainment or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lions Gate Entertainment vs. LION ONE METALS
Performance |
| Timeline |
| Lions Gate Entertainment |
| LION ONE METALS |
Lions Gate and LION ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lions Gate and LION ONE
The main advantage of trading using opposite Lions Gate and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lions Gate position performs unexpectedly, LION ONE 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 LION ONE will offset losses from the drop in LION ONE's long position.| Lions Gate vs. LION ONE METALS | Lions Gate vs. ARDAGH METAL PACDL 0001 | Lions Gate vs. DICKS Sporting Goods | Lions Gate vs. USWE SPORTS AB |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |