Correlation Between MEDIFAST INC and Lionsgate Studios

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

By analyzing existing cross correlation between MEDIFAST INC and Lionsgate Studios Corp, you can compare the effects of market volatilities on MEDIFAST INC and Lionsgate Studios 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 MEDIFAST INC with a short position of Lionsgate Studios. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIFAST INC and Lionsgate Studios.

Diversification Opportunities for MEDIFAST INC and Lionsgate Studios

-0.14

Correlation Coefficient

MEDIFAST INC  Lionsgate Studios

Good diversification

The 3 months correlation between MEDIFAST and Lionsgate is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding MEDIFAST INC and Lionsgate Studios Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionsgate Studios Corp and MEDIFAST INC 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 MEDIFAST INC are associated (or correlated) with Lionsgate Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionsgate Studios Corp has no effect on the direction of MEDIFAST INC i.e., MEDIFAST INC and Lionsgate Studios go up and down completely randomly.

Pair Corralation between MEDIFAST INC and Lionsgate Studios

Considering the 90-day investment horizon MEDIFAST INC is expected to under-perform the Lionsgate Studios. In addition to that, MEDIFAST INC is 1.28 times more volatile than Lionsgate Studios Corp. It trades about -0.07 of its total potential returns per unit of risk. Lionsgate Studios Corp is currently generating about 0.04 per unit of volatility. If you would invest  654.00  in Lionsgate Studios Corp on October 24, 2024 and sell it today you would earn a total of  25.00  from holding Lionsgate Studios Corp or generate 3.82% return on investment over 90 days.

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

MEDIFAST INC  vs.  Lionsgate Studios Corp

MEDIFAST INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDIFAST INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Lionsgate Studios Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lionsgate Studios Corp are ranked lower than 3 (%) 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 latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with MEDIFAST INC and Lionsgate Studios

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

The idea behind MEDIFAST INC and Lionsgate Studios 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.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.