Correlation Between Metro One and Lions Gate
Can any of the company-specific risk be diversified away by investing in both Metro One 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 Metro One and Lions Gate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro One Telecommunications and Lions Gate Entertainment, you can compare the effects of market volatilities on Metro One 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 Metro One with a short position of Lions Gate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro One and Lions Gate.
Diversification Opportunities for Metro One and Lions Gate
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Metro and Lions is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Metro One Telecommunications 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 Metro One 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 Metro One Telecommunications 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 Metro One i.e., Metro One and Lions Gate go up and down completely randomly.
Pair Corralation between Metro One and Lions Gate
If you would invest 793.00 in Lions Gate Entertainment on August 31, 2024 and sell it today you would earn a total of 45.00 from holding Lions Gate Entertainment or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Metro One Telecommunications vs. Lions Gate Entertainment
Performance |
| Timeline |
| Metro One Telecommun |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lions Gate Entertainment |
Metro One and Lions Gate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro One and Lions Gate
The main advantage of trading using opposite Metro One and Lions Gate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro One 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.The idea behind Metro One Telecommunications and Lions Gate Entertainment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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