Correlation Between Lionsgate Studios and Merchants Bancorp
Can any of the company-specific risk be diversified away by investing in both Lionsgate Studios and Merchants Bancorp 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 Lionsgate Studios and Merchants Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lionsgate Studios Corp and Merchants Bancorp, you can compare the effects of market volatilities on Lionsgate Studios and Merchants Bancorp 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 Lionsgate Studios with a short position of Merchants Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lionsgate Studios and Merchants Bancorp.
Diversification Opportunities for Lionsgate Studios and Merchants Bancorp
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lionsgate and Merchants is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lionsgate Studios Corp and Merchants Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merchants Bancorp and Lionsgate Studios 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 Lionsgate Studios Corp are associated (or correlated) with Merchants Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merchants Bancorp has no effect on the direction of Lionsgate Studios i.e., Lionsgate Studios and Merchants Bancorp go up and down completely randomly.
Pair Corralation between Lionsgate Studios and Merchants Bancorp
Given the investment horizon of 90 days Lionsgate Studios Corp is expected to under-perform the Merchants Bancorp. In addition to that, Lionsgate Studios is 1.15 times more volatile than Merchants Bancorp. It trades about -0.14 of its total potential returns per unit of risk. Merchants Bancorp is currently generating about 0.35 per unit of volatility. If you would invest 3,600 in Merchants Bancorp on November 3, 2024 and sell it today you would earn a total of 593.00 from holding Merchants Bancorp or generate 16.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lionsgate Studios Corp vs. Merchants Bancorp
Performance |
| Timeline |
| Lionsgate Studios Corp |
| Merchants Bancorp |
Lionsgate Studios and Merchants Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lionsgate Studios and Merchants Bancorp
The main advantage of trading using opposite Lionsgate Studios and Merchants Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lionsgate Studios position performs unexpectedly, Merchants Bancorp 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 Merchants Bancorp will offset losses from the drop in Merchants Bancorp's long position.| Lionsgate Studios vs. Vita Coco | Lionsgate Studios vs. Townsquare Media | Lionsgate Studios vs. Marchex | Lionsgate Studios vs. Elite Education Group |
| Merchants Bancorp vs. RBB Bancorp | Merchants Bancorp vs. Midland States Bancorp | Merchants Bancorp vs. SmartFinancial, | Merchants Bancorp vs. Business First Bancshares |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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