Correlation Between Lamar Advertising and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and WIMFARM SA 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 WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and WIMFARM SA EO, you can compare the effects of market volatilities on Lamar Advertising and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and WIMFARM SA.
Diversification Opportunities for Lamar Advertising and WIMFARM SA
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lamar and WIMFARM is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and WIMFARM SA go up and down completely randomly.
Pair Corralation between Lamar Advertising and WIMFARM SA
Assuming the 90 days trading horizon Lamar Advertising is expected to generate 4.66 times less return on investment than WIMFARM SA. But when comparing it to its historical volatility, Lamar Advertising is 3.7 times less risky than WIMFARM SA. It trades about 0.04 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 347.00 in WIMFARM SA EO on November 8, 2024 and sell it today you would earn a total of 32.00 from holding WIMFARM SA EO or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamar Advertising vs. WIMFARM SA EO
Performance |
| Timeline |
| Lamar Advertising |
| WIMFARM SA EO |
Lamar Advertising and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and WIMFARM SA
The main advantage of trading using opposite Lamar Advertising and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| Lamar Advertising vs. Boyd Gaming | Lamar Advertising vs. Penn National Gaming | Lamar Advertising vs. GigaMedia | Lamar Advertising vs. FRACTAL GAMING GROUP |
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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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