Correlation Between Lionsgate Studios and NewHold Investment
Can any of the company-specific risk be diversified away by investing in both Lionsgate Studios and NewHold Investment 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 NewHold Investment 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 NewHold Investment Corp, you can compare the effects of market volatilities on Lionsgate Studios and NewHold Investment 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 NewHold Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lionsgate Studios and NewHold Investment.
Diversification Opportunities for Lionsgate Studios and NewHold Investment
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lionsgate and NewHold is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lionsgate Studios Corp and NewHold Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewHold Investment Corp 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 NewHold Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewHold Investment Corp has no effect on the direction of Lionsgate Studios i.e., Lionsgate Studios and NewHold Investment go up and down completely randomly.
Pair Corralation between Lionsgate Studios and NewHold Investment
Given the investment horizon of 90 days Lionsgate Studios is expected to generate 1015.43 times less return on investment than NewHold Investment. But when comparing it to its historical volatility, Lionsgate Studios Corp is 30.15 times less risky than NewHold Investment. It trades about 0.0 of its potential returns per unit of risk. NewHold Investment Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4.50 in NewHold Investment Corp on August 26, 2024 and sell it today you would lose (3.20) from holding NewHold Investment Corp or give up 71.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.25% |
| Values | Daily Returns |
Lionsgate Studios Corp vs. NewHold Investment Corp
Performance |
| Timeline |
| Lionsgate Studios Corp |
| NewHold Investment Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lionsgate Studios and NewHold Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lionsgate Studios and NewHold Investment
The main advantage of trading using opposite Lionsgate Studios and NewHold Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lionsgate Studios position performs unexpectedly, NewHold Investment 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 NewHold Investment will offset losses from the drop in NewHold Investment's long position.| Lionsgate Studios vs. PowerUp Acquisition Corp | Lionsgate Studios vs. Aurora Innovation | Lionsgate Studios vs. HUMANA INC | Lionsgate Studios vs. Aquagold International |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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