Correlation Between Arbor Realty and Lionsgate Studios

Can any of the company-specific risk be diversified away by investing in both Arbor Realty and Lionsgate Studios 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 Arbor Realty and Lionsgate Studios into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arbor Realty Trust and Lionsgate Studios Corp, you can compare the effects of market volatilities on Arbor Realty and Lionsgate Studios 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 Arbor Realty with a short position of Lionsgate Studios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Realty and Lionsgate Studios.

Diversification Opportunities for Arbor Realty and Lionsgate Studios

-0.59

Correlation Coefficient

Arbor Realty  Lionsgate Studios

Excellent diversification

The 3 months correlation between Arbor and Lionsgate is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Realty Trust and Lionsgate Studios Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionsgate Studios Corp and Arbor Realty 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 Arbor Realty Trust are associated (or correlated) with Lionsgate Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionsgate Studios Corp has no effect on the direction of Arbor Realty i.e., Arbor Realty and Lionsgate Studios go up and down completely randomly.

Pair Corralation between Arbor Realty and Lionsgate Studios

Considering the 90-day investment horizon Arbor Realty Trust is expected to generate 0.45 times more return on investment than Lionsgate Studios. However, Arbor Realty Trust is 2.22 times less risky than Lionsgate Studios. It trades about 0.03 of its potential returns per unit of risk. Lionsgate Studios Corp is currently generating about 0.01 per unit of risk. If you would invest  1,120  in Arbor Realty Trust on October 11, 2024 and sell it today you would earn a total of  229.00  from holding Arbor Realty Trust or generate 20.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Arbor Realty Trust  vs.  Lionsgate Studios Corp

Arbor Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arbor Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Lionsgate Studios Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lionsgate Studios Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Lionsgate Studios may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Arbor Realty and Lionsgate Studios

The main advantage of trading using opposite Arbor Realty and Lionsgate Studios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Realty position performs unexpectedly, Lionsgate Studios 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 Lionsgate Studios will offset losses from the drop in Lionsgate Studios' long position.

The idea behind Arbor Realty Trust and Lionsgate Studios Corp 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.