Correlation Between Lionsgate Studios and Rmy Cointreau

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

Diversification Opportunities for Lionsgate Studios and Rmy Cointreau

-0.25

Correlation Coefficient

Lionsgate Studios  Rmy Cointreau

Very good diversification

The 3 months correlation between Lionsgate and Rmy is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lionsgate Studios Corp and Rmy Cointreau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmy Cointreau SA 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 Rmy Cointreau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmy Cointreau SA has no effect on the direction of Lionsgate Studios i.e., Lionsgate Studios and Rmy Cointreau go up and down completely randomly.

Pair Corralation between Lionsgate Studios and Rmy Cointreau

Given the investment horizon of 90 days Lionsgate Studios Corp is expected to generate 0.97 times more return on investment than Rmy Cointreau. However, Lionsgate Studios Corp is 1.04 times less risky than Rmy Cointreau. It trades about 0.03 of its potential returns per unit of risk. Rmy Cointreau SA is currently generating about -0.07 per unit of risk. If you would invest  666.00  in Lionsgate Studios Corp on October 25, 2024 and sell it today you would earn a total of  13.00  from holding Lionsgate Studios Corp or generate 1.95% return on investment over 90 days.

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

Lionsgate Studios Corp  vs.  Rmy Cointreau SA

Lionsgate Studios Corp

Risk-Adjusted Performance

1 of 100

Insignificant

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 current stock price disarray, may contribute to short-term losses for the investors.

Rmy Cointreau SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rmy Cointreau SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Lionsgate Studios and Rmy Cointreau

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

The idea behind Lionsgate Studios Corp and Rmy Cointreau SA 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .