Correlation Between Lamar Advertising and Gaming
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and Gaming 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 Lamar Advertising and Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and Gaming and Leisure, you can compare the effects of market volatilities on Lamar Advertising and Gaming 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 Lamar Advertising with a short position of Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and Gaming.
Diversification Opportunities for Lamar Advertising and Gaming
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lamar and Gaming is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and Gaming and Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming and Leisure and Lamar Advertising 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 Lamar Advertising are associated (or correlated) with Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming and Leisure has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and Gaming go up and down completely randomly.
Pair Corralation between Lamar Advertising and Gaming
Assuming the 90 days horizon Lamar Advertising is expected to generate 0.58 times more return on investment than Gaming. However, Lamar Advertising is 1.71 times less risky than Gaming. It trades about 0.14 of its potential returns per unit of risk. Gaming and Leisure is currently generating about -0.01 per unit of risk. If you would invest 11,700 in Lamar Advertising on November 3, 2024 and sell it today you would earn a total of 400.00 from holding Lamar Advertising or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamar Advertising vs. Gaming and Leisure
Performance |
| Timeline |
| Lamar Advertising |
| Gaming and Leisure |
Lamar Advertising and Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and Gaming
The main advantage of trading using opposite Lamar Advertising and Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, Gaming 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 Gaming will offset losses from the drop in Gaming's long position.| Lamar Advertising vs. VELA TECHNOLPLC LS 0001 | Lamar Advertising vs. Bio Techne Corp | Lamar Advertising vs. AAC TECHNOLOGHLDGADR | Lamar Advertising vs. UNIVERSAL MUSIC GROUP |
| Gaming vs. Yuexiu Transport Infrastructure | Gaming vs. ALERION CLEANPOWER | Gaming vs. Verizon Communications | Gaming vs. Highlight Communications AG |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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