Correlation Between Sinclair Broadcast and Lions Gate
Can any of the company-specific risk be diversified away by investing in both Sinclair Broadcast 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 Sinclair Broadcast and Lions Gate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinclair Broadcast Group and Lions Gate Entertainment, you can compare the effects of market volatilities on Sinclair Broadcast 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 Sinclair Broadcast with a short position of Lions Gate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinclair Broadcast and Lions Gate.
Diversification Opportunities for Sinclair Broadcast and Lions Gate
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sinclair and Lions is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group 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 Sinclair Broadcast 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 Sinclair Broadcast Group 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 Sinclair Broadcast i.e., Sinclair Broadcast and Lions Gate go up and down completely randomly.
Pair Corralation between Sinclair Broadcast and Lions Gate
Given the investment horizon of 90 days Sinclair Broadcast Group is expected to under-perform the Lions Gate. But the stock apears to be less risky and, when comparing its historical volatility, Sinclair Broadcast Group is 1.31 times less risky than Lions Gate. The stock trades about -0.35 of its potential returns per unit of risk. The Lions Gate Entertainment is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 860.00 in Lions Gate Entertainment on November 8, 2024 and sell it today you would lose (46.00) from holding Lions Gate Entertainment or give up 5.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinclair Broadcast Group vs. Lions Gate Entertainment
Performance |
| Timeline |
| Sinclair Broadcast |
| Lions Gate Entertainment |
Sinclair Broadcast and Lions Gate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinclair Broadcast and Lions Gate
The main advantage of trading using opposite Sinclair Broadcast and Lions Gate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinclair Broadcast 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.| Sinclair Broadcast vs. News Corp A | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. AMC Networks |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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