Correlation Between Lamar Advertising and JOYY INCSPADR/20
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and JOYY INCSPADR/20 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 JOYY INCSPADR/20 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and JOYY INCSPADR20 CLA, you can compare the effects of market volatilities on Lamar Advertising and JOYY INCSPADR/20 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 JOYY INCSPADR/20. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and JOYY INCSPADR/20.
Diversification Opportunities for Lamar Advertising and JOYY INCSPADR/20
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lamar and JOYY is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and JOYY INCSPADR20 CLA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JOYY INCSPADR20 CLA 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 JOYY INCSPADR/20. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JOYY INCSPADR20 CLA has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and JOYY INCSPADR/20 go up and down completely randomly.
Pair Corralation between Lamar Advertising and JOYY INCSPADR/20
Assuming the 90 days trading horizon Lamar Advertising is expected to generate 1.64 times less return on investment than JOYY INCSPADR/20. But when comparing it to its historical volatility, Lamar Advertising is 1.73 times less risky than JOYY INCSPADR/20. It trades about 0.11 of its potential returns per unit of risk. JOYY INCSPADR20 CLA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,740 in JOYY INCSPADR20 CLA on September 1, 2024 and sell it today you would earn a total of 840.00 from holding JOYY INCSPADR20 CLA or generate 30.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Lamar Advertising vs. JOYY INCSPADR20 CLA
Performance |
| Timeline |
| Lamar Advertising |
| JOYY INCSPADR20 CLA |
Lamar Advertising and JOYY INCSPADR/20 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and JOYY INCSPADR/20
The main advantage of trading using opposite Lamar Advertising and JOYY INCSPADR/20 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, JOYY INCSPADR/20 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 JOYY INCSPADR/20 will offset losses from the drop in JOYY INCSPADR/20's long position.| Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc |
| JOYY INCSPADR/20 vs. Alphabet Class A | JOYY INCSPADR/20 vs. Alphabet Class A | JOYY INCSPADR/20 vs. Meta Platforms | JOYY INCSPADR/20 vs. Tencent Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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