Correlation Between Micron Technology and Lionsgate Studios

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

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

Diversification Opportunities for Micron Technology and Lionsgate Studios

-0.63

Correlation Coefficient

Micron Technology  Lionsgate Studios

Excellent diversification

The 3 months correlation between Micron and Lionsgate is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology 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 Micron Technology 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 Micron Technology 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 Micron Technology i.e., Micron Technology and Lionsgate Studios go up and down completely randomly.

Pair Corralation between Micron Technology and Lionsgate Studios

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Lionsgate Studios. In addition to that, Micron Technology is 1.58 times more volatile than Lionsgate Studios Corp. It trades about -0.08 of its total potential returns per unit of risk. Lionsgate Studios Corp is currently generating about 0.19 per unit of volatility. If you would invest  676.00  in Lionsgate Studios Corp on October 6, 2024 and sell it today you would earn a total of  133.00  from holding Lionsgate Studios Corp or generate 19.67% return on investment over 90 days.

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

Micron Technology  vs.  Lionsgate Studios Corp

Micron Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micron Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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 weak basic indicators, Lionsgate Studios displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Micron Technology and Lionsgate Studios

The main advantage of trading using opposite Micron Technology and Lionsgate Studios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology 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 Micron Technology 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.