Correlation Between Marcus and Lions Gate

Can any of the company-specific risk be diversified away by investing in both Marcus and Lions Gate 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 Marcus and Lions Gate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marcus and Lions Gate Entertainment, you can compare the effects of market volatilities on Marcus and Lions Gate 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 Marcus with a short position of Lions Gate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcus and Lions Gate.

Diversification Opportunities for Marcus and Lions Gate

0.03

Correlation Coefficient

Marcus  Lions Gate

Significant diversification

The 3 months correlation between Marcus and Lions is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and Lions Gate Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lions Gate Entertainment and Marcus 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 Marcus are associated (or correlated) with Lions Gate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lions Gate Entertainment has no effect on the direction of Marcus i.e., Marcus and Lions Gate go up and down completely randomly.

Pair Corralation between Marcus and Lions Gate

Considering the 90-day investment horizon Marcus is expected to under-perform the Lions Gate. But the stock apears to be less risky and, when comparing its historical volatility, Marcus is 1.57 times less risky than Lions Gate. The stock trades about -0.18 of its potential returns per unit of risk. The Lions Gate Entertainment is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  749.00  in Lions Gate Entertainment on December 1, 2024 and sell it today you would earn a total of  132.00  from holding Lions Gate Entertainment or generate 17.62% return on investment over 90 days.

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

Marcus  vs.  Lions Gate Entertainment

Marcus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marcus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Lions Gate Entertainment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lions Gate Entertainment are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lions Gate sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marcus and Lions Gate

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

The idea behind Marcus and Lions Gate Entertainment 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.