Correlation Between Lionsgate Studios and National Beverage

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

Diversification Opportunities for Lionsgate Studios and National Beverage

-0.7

Correlation Coefficient

Lionsgate Studios  National Beverage

Excellent diversification

The 3 months correlation between Lionsgate and National is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lionsgate Studios Corp and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Lionsgate Studios i.e., Lionsgate Studios and National Beverage go up and down completely randomly.

Pair Corralation between Lionsgate Studios and National Beverage

Given the investment horizon of 90 days Lionsgate Studios Corp is expected to generate 1.93 times more return on investment than National Beverage. However, Lionsgate Studios is 1.93 times more volatile than National Beverage Corp. It trades about 0.1 of its potential returns per unit of risk. National Beverage Corp is currently generating about -0.21 per unit of risk. If you would invest  697.00  in Lionsgate Studios Corp on December 4, 2024 and sell it today you would earn a total of  121.00  from holding Lionsgate Studios Corp or generate 17.36% return on investment over 90 days.

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

Lionsgate Studios Corp  vs.  National Beverage Corp

Lionsgate Studios Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lionsgate Studios Corp are ranked lower than 7 (%) 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.

National Beverage Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days National Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Lionsgate Studios and National Beverage

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

The idea behind Lionsgate Studios Corp and National Beverage Corp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.