Correlation Between NYSE Composite and Lions Gate
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Lions Gate 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 NYSE Composite and Lions Gate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Lions Gate Entertainment, you can compare the effects of market volatilities on NYSE Composite and Lions Gate 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 NYSE Composite with a short position of Lions Gate. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lions Gate.
Diversification Opportunities for NYSE Composite and Lions Gate
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Lions is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Lions Gate Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lions Gate Entertainment and NYSE Composite 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 NYSE Composite are associated (or correlated) with Lions Gate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lions Gate Entertainment has no effect on the direction of NYSE Composite i.e., NYSE Composite and Lions Gate go up and down completely randomly.
Pair Corralation between NYSE Composite and Lions Gate
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.27 times more return on investment than Lions Gate. However, NYSE Composite is 3.72 times less risky than Lions Gate. It trades about 0.28 of its potential returns per unit of risk. Lions Gate Entertainment is currently generating about -0.22 per unit of risk. If you would invest 1,925,429 in NYSE Composite on November 4, 2024 and sell it today you would earn a total of 74,453 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Lions Gate Entertainment
Performance |
| Timeline |
NYSE Composite and Lions Gate Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lions Gate Entertainment
Pair trading matchups for Lions Gate
Pair Trading with NYSE Composite and Lions Gate
The main advantage of trading using opposite NYSE Composite and Lions Gate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Lions Gate 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 Lions Gate will offset losses from the drop in Lions Gate's long position.| NYSE Composite vs. Arrow Electronics | NYSE Composite vs. Cirmaker Technology | NYSE Composite vs. Zhihu Inc ADR | NYSE Composite vs. Weibo Corp |
| Lions Gate vs. Lions Gate Entertainment | Lions Gate vs. AMC Networks | Lions Gate vs. Altice USA | Lions Gate vs. Liberty Broadband Srs |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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