Correlation Between International Media and Lionheart Holdings

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

By analyzing existing cross correlation between International Media Acquisition and Lionheart Holdings, you can compare the effects of market volatilities on International Media and Lionheart Holdings 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 International Media with a short position of Lionheart Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Media and Lionheart Holdings.

Diversification Opportunities for International Media and Lionheart Holdings

-0.58

Correlation Coefficient

International Media  Lionheart Holdings

Excellent diversification

The 3 months correlation between International and Lionheart is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding International Media Acquisitio and Lionheart Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionheart Holdings and International Media 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 International Media Acquisition are associated (or correlated) with Lionheart Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionheart Holdings has no effect on the direction of International Media i.e., International Media and Lionheart Holdings go up and down completely randomly.

Pair Corralation between International Media and Lionheart Holdings

If you would invest  1,001  in Lionheart Holdings on August 31, 2024 and sell it today you would earn a total of  5.00  from holding Lionheart Holdings or generate 0.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

International Media Acquisitio  vs.  Lionheart Holdings

International Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Media Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, International Media is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Lionheart Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lionheart Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Lionheart Holdings is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with International Media and Lionheart Holdings

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

The idea behind International Media Acquisition and Lionheart Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.