Correlation Between CENTURIA OFFICE and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Lamar Advertising 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 CENTURIA OFFICE and Lamar Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CENTURIA OFFICE REIT and Lamar Advertising, you can compare the effects of market volatilities on CENTURIA OFFICE and Lamar Advertising 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 CENTURIA OFFICE with a short position of Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Lamar Advertising.
Diversification Opportunities for CENTURIA OFFICE and Lamar Advertising
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CENTURIA and Lamar is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising and CENTURIA OFFICE 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 CENTURIA OFFICE REIT are associated (or correlated) with Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Lamar Advertising go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Lamar Advertising
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to under-perform the Lamar Advertising. But the stock apears to be less risky and, when comparing its historical volatility, CENTURIA OFFICE REIT is 1.09 times less risky than Lamar Advertising. The stock trades about -0.17 of its potential returns per unit of risk. The Lamar Advertising is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 11,800 in Lamar Advertising on September 3, 2024 and sell it today you would earn a total of 800.00 from holding Lamar Advertising or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. Lamar Advertising
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Lamar Advertising |
CENTURIA OFFICE and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Lamar Advertising
The main advantage of trading using opposite CENTURIA OFFICE and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Lamar Advertising 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 Lamar Advertising will offset losses from the drop in Lamar Advertising's long position.| CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc |
| Lamar Advertising vs. CITY OFFICE REIT | Lamar Advertising vs. Infrastrutture Wireless Italiane | Lamar Advertising vs. CENTURIA OFFICE REIT | Lamar Advertising vs. Transportadora de Gas |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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