Correlation Between Lionsgate Studios and Atlantic Energy

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

Diversification Opportunities for Lionsgate Studios and Atlantic Energy

-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Lionsgate and Atlantic is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lionsgate Studios Corp and Atlantic Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Energy Solutions 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 Atlantic Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Energy Solutions has no effect on the direction of Lionsgate Studios i.e., Lionsgate Studios and Atlantic Energy go up and down completely randomly.

Pair Corralation between Lionsgate Studios and Atlantic Energy

Given the investment horizon of 90 days Lionsgate Studios is expected to generate 5.25 times less return on investment than Atlantic Energy. But when comparing it to its historical volatility, Lionsgate Studios Corp is 6.84 times less risky than Atlantic Energy. It trades about 0.04 of its potential returns per unit of risk. Atlantic Energy Solutions is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Atlantic Energy Solutions on October 23, 2024 and sell it today you would lose (0.76) from holding Atlantic Energy Solutions or give up 38.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

Lionsgate Studios Corp  vs.  Atlantic Energy Solutions

 Performance 
       Timeline  
Lionsgate Studios Corp 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Lionsgate Studios Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Lionsgate Studios is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.
Atlantic Energy Solutions 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Atlantic Energy Solutions are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Atlantic Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Lionsgate Studios and Atlantic Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lionsgate Studios and Atlantic Energy

The main advantage of trading using opposite Lionsgate Studios and Atlantic Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lionsgate Studios position performs unexpectedly, Atlantic Energy 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 Atlantic Energy will offset losses from the drop in Atlantic Energy's long position.
The idea behind Lionsgate Studios Corp and Atlantic Energy Solutions 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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