Correlation Between Lamar Advertising and ADRIATIC METALS
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and ADRIATIC METALS 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 ADRIATIC METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on Lamar Advertising and ADRIATIC METALS 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 ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and ADRIATIC METALS.
Diversification Opportunities for Lamar Advertising and ADRIATIC METALS
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lamar and ADRIATIC is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS 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 ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and ADRIATIC METALS go up and down completely randomly.
Pair Corralation between Lamar Advertising and ADRIATIC METALS
Assuming the 90 days trading horizon Lamar Advertising is expected to generate 0.65 times more return on investment than ADRIATIC METALS. However, Lamar Advertising is 1.54 times less risky than ADRIATIC METALS. It trades about -0.23 of its potential returns per unit of risk. ADRIATIC METALS LS 013355 is currently generating about -0.34 per unit of risk. If you would invest 12,275 in Lamar Advertising on October 13, 2024 and sell it today you would lose (775.00) from holding Lamar Advertising or give up 6.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Lamar Advertising vs. ADRIATIC METALS LS 013355
Performance |
| Timeline |
| Lamar Advertising |
| ADRIATIC METALS LS |
Lamar Advertising and ADRIATIC METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and ADRIATIC METALS
The main advantage of trading using opposite Lamar Advertising and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.| Lamar Advertising vs. Waste Management | Lamar Advertising vs. Penn National Gaming | Lamar Advertising vs. GAMESTOP | Lamar Advertising vs. Cleanaway Waste Management |
| ADRIATIC METALS vs. Lamar Advertising | ADRIATIC METALS vs. GungHo Online Entertainment | ADRIATIC METALS vs. Ares Management Corp | ADRIATIC METALS vs. Penta Ocean Construction Co |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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