Correlation Between Lamar Advertising and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and ZhongAn Online 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 ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and ZhongAn Online P, you can compare the effects of market volatilities on Lamar Advertising and ZhongAn Online 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 ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and ZhongAn Online.
Diversification Opportunities for Lamar Advertising and ZhongAn Online
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lamar and ZhongAn is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P 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 ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and ZhongAn Online go up and down completely randomly.
Pair Corralation between Lamar Advertising and ZhongAn Online
Assuming the 90 days trading horizon Lamar Advertising is expected to generate 0.3 times more return on investment than ZhongAn Online. However, Lamar Advertising is 3.38 times less risky than ZhongAn Online. It trades about 0.09 of its potential returns per unit of risk. ZhongAn Online P is currently generating about 0.02 per unit of risk. If you would invest 9,382 in Lamar Advertising on November 3, 2024 and sell it today you would earn a total of 2,718 from holding Lamar Advertising or generate 28.97% 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. ZhongAn Online P
Performance |
| Timeline |
| Lamar Advertising |
| ZhongAn Online P |
Lamar Advertising and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and ZhongAn Online
The main advantage of trading using opposite Lamar Advertising and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.| Lamar Advertising vs. HOCHSCHILD MINING | Lamar Advertising vs. Media and Games | Lamar Advertising vs. Scientific Games | Lamar Advertising vs. DETALION GAMES SA |
| ZhongAn Online vs. SENECA FOODS A | ZhongAn Online vs. Casio Computer CoLtd | ZhongAn Online vs. GMO Internet | ZhongAn Online vs. Verizon Communications |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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