Correlation Between Lionsgate Studios and Bancroft Fund

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

Diversification Opportunities for Lionsgate Studios and Bancroft Fund

-0.49

Correlation Coefficient

Lionsgate Studios  Bancroft Fund

Very good diversification

The 3 months correlation between Lionsgate and Bancroft is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lionsgate Studios Corp and Bancroft Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancroft Fund 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 Bancroft Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancroft Fund has no effect on the direction of Lionsgate Studios i.e., Lionsgate Studios and Bancroft Fund go up and down completely randomly.

Pair Corralation between Lionsgate Studios and Bancroft Fund

Given the investment horizon of 90 days Lionsgate Studios Corp is expected to generate 2.51 times more return on investment than Bancroft Fund. However, Lionsgate Studios is 2.51 times more volatile than Bancroft Fund. It trades about 0.01 of its potential returns per unit of risk. Bancroft Fund is currently generating about -0.04 per unit of risk. If you would invest  703.00  in Lionsgate Studios Corp on September 24, 2024 and sell it today you would earn a total of  3.00  from holding Lionsgate Studios Corp or generate 0.43% return on investment over 90 days.

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

Lionsgate Studios Corp  vs.  Bancroft Fund

Lionsgate Studios Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lionsgate Studios Corp are ranked lower than 1 (%) 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 recent stock price disarray, may contribute to short-term losses for the investors.

Bancroft Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bancroft Fund has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bancroft Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lionsgate Studios and Bancroft Fund

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

The idea behind Lionsgate Studios Corp and Bancroft Fund 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.