Correlation Between Associated Capital and Lionsgate Studios

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

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

Diversification Opportunities for Associated Capital and Lionsgate Studios

-0.5

Correlation Coefficient

Associated Capital  Lionsgate Studios

Very good diversification

The 3 months correlation between Associated and Lionsgate is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group 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 Associated Capital 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 Associated Capital Group 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 Associated Capital i.e., Associated Capital and Lionsgate Studios go up and down completely randomly.

Pair Corralation between Associated Capital and Lionsgate Studios

Allowing for the 90-day total investment horizon Associated Capital is expected to generate 4.03 times less return on investment than Lionsgate Studios. But when comparing it to its historical volatility, Associated Capital Group is 3.26 times less risky than Lionsgate Studios. It trades about 0.01 of its potential returns per unit of risk. Lionsgate Studios Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,026  in Lionsgate Studios Corp on October 12, 2024 and sell it today you would lose (258.00) from holding Lionsgate Studios Corp or give up 25.15% of portfolio value over 90 days.

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

Associated Capital Group  vs.  Lionsgate Studios Corp

Associated Capital

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Capital Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Associated Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 weak basic indicators, Lionsgate Studios displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Associated Capital and Lionsgate Studios

The main advantage of trading using opposite Associated Capital and Lionsgate Studios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital 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 Associated Capital Group 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.