Correlation Between Lamar Advertising and HubSpot
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and HubSpot 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 HubSpot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and HubSpot, you can compare the effects of market volatilities on Lamar Advertising and HubSpot 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 HubSpot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and HubSpot.
Diversification Opportunities for Lamar Advertising and HubSpot
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lamar and HubSpot is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and HubSpot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HubSpot 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 HubSpot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HubSpot has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and HubSpot go up and down completely randomly.
Pair Corralation between Lamar Advertising and HubSpot
Assuming the 90 days trading horizon Lamar Advertising is expected to generate 3.83 times less return on investment than HubSpot. But when comparing it to its historical volatility, Lamar Advertising is 1.99 times less risky than HubSpot. It trades about 0.08 of its potential returns per unit of risk. HubSpot is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 65,420 in HubSpot on September 13, 2024 and sell it today you would earn a total of 4,220 from holding HubSpot or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamar Advertising vs. HubSpot
Performance |
| Timeline |
| Lamar Advertising |
| HubSpot |
Lamar Advertising and HubSpot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and HubSpot
The main advantage of trading using opposite Lamar Advertising and HubSpot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, HubSpot 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 HubSpot will offset losses from the drop in HubSpot's long position.| Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc |
| HubSpot vs. MOLSON RS BEVERAGE | HubSpot vs. Calibre Mining Corp | HubSpot vs. National Beverage Corp | HubSpot vs. Evolution Mining Limited |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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