Correlation Between Lionsgate Studios and Mundus

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

Diversification Opportunities for Lionsgate Studios and Mundus

0.28

Correlation Coefficient

Lionsgate Studios  Mundus

Modest diversification

The 3 months correlation between Lionsgate and Mundus is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lionsgate Studios Corp and Mundus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mundus Group 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 Mundus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mundus Group has no effect on the direction of Lionsgate Studios i.e., Lionsgate Studios and Mundus go up and down completely randomly.

Pair Corralation between Lionsgate Studios and Mundus

Given the investment horizon of 90 days Lionsgate Studios Corp is expected to generate 0.34 times more return on investment than Mundus. However, Lionsgate Studios Corp is 2.92 times less risky than Mundus. It trades about 0.08 of its potential returns per unit of risk. Mundus Group is currently generating about 0.03 per unit of risk. If you would invest  706.00  in Lionsgate Studios Corp on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Lionsgate Studios Corp or generate 14.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Lionsgate Studios Corp  vs.  Mundus Group

Lionsgate Studios Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lionsgate Studios Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Lionsgate Studios displayed solid returns over the last few months and may actually be approaching a breakup point.

Mundus Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mundus Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental indicators, Mundus reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lionsgate Studios and Mundus

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

The idea behind Lionsgate Studios Corp and Mundus Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.