Correlation Between Lionsgate Studios and Altisource Asset

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

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

Diversification Opportunities for Lionsgate Studios and Altisource Asset

-0.66

Correlation Coefficient

Lionsgate Studios  Altisource Asset

Excellent diversification

The 3 months correlation between Lionsgate and Altisource is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lionsgate Studios Corp and Altisource Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altisource Asset Man and Lionsgate Studios 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 Lionsgate Studios Corp are associated (or correlated) with Altisource Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altisource Asset Man has no effect on the direction of Lionsgate Studios i.e., Lionsgate Studios and Altisource Asset go up and down completely randomly.

Pair Corralation between Lionsgate Studios and Altisource Asset

Given the investment horizon of 90 days Lionsgate Studios Corp is expected to generate 0.47 times more return on investment than Altisource Asset. However, Lionsgate Studios Corp is 2.14 times less risky than Altisource Asset. It trades about 0.01 of its potential returns per unit of risk. Altisource Asset Management is currently generating about -0.58 per unit of risk. If you would invest  699.00  in Lionsgate Studios Corp on September 14, 2024 and sell it today you would lose (1.00) from holding Lionsgate Studios Corp or give up 0.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Lionsgate Studios Corp  vs.  Altisource Asset Management

Lionsgate Studios Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lionsgate Studios Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Lionsgate Studios is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Altisource Asset Man

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altisource Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Lionsgate Studios and Altisource Asset

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

The idea behind Lionsgate Studios Corp and Altisource Asset Management 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.