Correlation Between Lionsgate Studios and Via Renewables

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

Diversification Opportunities for Lionsgate Studios and Via Renewables

0.53

Correlation Coefficient

Lionsgate Studios  Via Renewables

Very weak diversification

The 3 months correlation between Lionsgate and Via is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lionsgate Studios Corp and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Lionsgate Studios i.e., Lionsgate Studios and Via Renewables go up and down completely randomly.

Pair Corralation between Lionsgate Studios and Via Renewables

Given the investment horizon of 90 days Lionsgate Studios Corp is expected to under-perform the Via Renewables. But the stock apears to be less risky and, when comparing its historical volatility, Lionsgate Studios Corp is 1.57 times less risky than Via Renewables. The stock trades about -0.02 of its potential returns per unit of risk. The Via Renewables is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,741  in Via Renewables on October 5, 2024 and sell it today you would earn a total of  574.00  from holding Via Renewables or generate 32.97% return on investment over 90 days.

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

Lionsgate Studios Corp  vs.  Via Renewables

Lionsgate Studios Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lionsgate Studios Corp are ranked lower than 9 (%) 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.

Via Renewables

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lionsgate Studios and Via Renewables

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

The idea behind Lionsgate Studios Corp and Via Renewables 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.