Correlation Between Rand Capital and Lionsgate Studios

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

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

Diversification Opportunities for Rand Capital and Lionsgate Studios

0.42

Correlation Coefficient

Rand Capital  Lionsgate Studios

Very weak diversification

The 3 months correlation between Rand and Lionsgate is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Rand Capital Corp 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 Rand Capital 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 Rand Capital Corp 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 Rand Capital i.e., Rand Capital and Lionsgate Studios go up and down completely randomly.

Pair Corralation between Rand Capital and Lionsgate Studios

Given the investment horizon of 90 days Rand Capital Corp is expected to generate 1.54 times more return on investment than Lionsgate Studios. However, Rand Capital is 1.54 times more volatile than Lionsgate Studios Corp. It trades about 0.16 of its potential returns per unit of risk. Lionsgate Studios Corp is currently generating about 0.02 per unit of risk. If you would invest  1,371  in Rand Capital Corp on September 29, 2024 and sell it today you would earn a total of  444.00  from holding Rand Capital Corp or generate 32.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Rand Capital Corp  vs.  Lionsgate Studios Corp

Rand Capital Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rand Capital Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Rand Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Lionsgate Studios Corp

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Rand Capital and Lionsgate Studios

The main advantage of trading using opposite Rand Capital and Lionsgate Studios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rand Capital 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 Rand Capital Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.