Correlation Between Entegris and Lionsgate Studios

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

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

Diversification Opportunities for Entegris and Lionsgate Studios

-0.04

Correlation Coefficient

Entegris  Lionsgate Studios

Good diversification

The 3 months correlation between Entegris and Lionsgate is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Entegris 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 Entegris 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 Entegris 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 Entegris i.e., Entegris and Lionsgate Studios go up and down completely randomly.

Pair Corralation between Entegris and Lionsgate Studios

Given the investment horizon of 90 days Entegris is expected to under-perform the Lionsgate Studios. In addition to that, Entegris is 1.02 times more volatile than Lionsgate Studios Corp. It trades about -0.01 of its total potential returns per unit of risk. Lionsgate Studios Corp is currently generating about 0.19 per unit of volatility. If you would invest  676.00  in Lionsgate Studios Corp on October 6, 2024 and sell it today you would earn a total of  133.00  from holding Lionsgate Studios Corp or generate 19.67% return on investment over 90 days.

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

Entegris  vs.  Lionsgate Studios Corp

Entegris

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Entegris has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Lionsgate Studios Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lionsgate Studios Corp are ranked lower than 9 (%) 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 Entegris and Lionsgate Studios

The main advantage of trading using opposite Entegris and Lionsgate Studios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entegris 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 Entegris 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.