Correlation Between Lionsgate Studios and All American

Can any of the company-specific risk be diversified away by investing in both Lionsgate Studios and All American 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 All American 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 All American Pet, you can compare the effects of market volatilities on Lionsgate Studios and All American 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 All American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lionsgate Studios and All American.

Diversification Opportunities for Lionsgate Studios and All American

-0.55

Correlation Coefficient

Lionsgate Studios  All American

Excellent diversification

The 3 months correlation between Lionsgate and All is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lionsgate Studios Corp and All American Pet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All American Pet 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 All American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All American Pet has no effect on the direction of Lionsgate Studios i.e., Lionsgate Studios and All American go up and down completely randomly.

Pair Corralation between Lionsgate Studios and All American

Given the investment horizon of 90 days Lionsgate Studios is expected to generate 93.53 times less return on investment than All American. But when comparing it to its historical volatility, Lionsgate Studios Corp is 9.95 times less risky than All American. It trades about 0.01 of its potential returns per unit of risk. All American Pet is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.03  in All American Pet on October 5, 2024 and sell it today you would lose (0.03) from holding All American Pet or give up 100.0% of portfolio value over 90 days.

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

Lionsgate Studios Corp  vs.  All American Pet

Lionsgate Studios Corp

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lionsgate Studios Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Lionsgate Studios displayed solid returns over the last few months and may actually be approaching a breakup point.

All American Pet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days All American Pet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Lionsgate Studios and All American

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

The idea behind Lionsgate Studios Corp and All American Pet 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.