Correlation Between Lamar Advertising and Avance Gas
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and Avance Gas 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 Avance Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and Avance Gas Holding, you can compare the effects of market volatilities on Lamar Advertising and Avance Gas 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 Avance Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and Avance Gas.
Diversification Opportunities for Lamar Advertising and Avance Gas
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lamar and Avance is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and Avance Gas Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avance Gas Holding 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 Avance Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avance Gas Holding has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and Avance Gas go up and down completely randomly.
Pair Corralation between Lamar Advertising and Avance Gas
Assuming the 90 days trading horizon Lamar Advertising is expected to under-perform the Avance Gas. But the stock apears to be less risky and, when comparing its historical volatility, Lamar Advertising is 3.14 times less risky than Avance Gas. The stock trades about -0.2 of its potential returns per unit of risk. The Avance Gas Holding is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 656.00 in Avance Gas Holding on October 9, 2024 and sell it today you would earn a total of 113.00 from holding Avance Gas Holding or generate 17.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Lamar Advertising vs. Avance Gas Holding
Performance |
| Timeline |
| Lamar Advertising |
| Avance Gas Holding |
Lamar Advertising and Avance Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and Avance Gas
The main advantage of trading using opposite Lamar Advertising and Avance Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, Avance Gas 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 Avance Gas will offset losses from the drop in Avance Gas' long position.| Lamar Advertising vs. Forsys Metals Corp | Lamar Advertising vs. SWISS WATER DECAFFCOFFEE | Lamar Advertising vs. Monument Mining Limited | Lamar Advertising vs. GREENX METALS LTD |
| Avance Gas vs. Infrastrutture Wireless Italiane | Avance Gas vs. Ubisoft Entertainment SA | Avance Gas vs. Nexstar Media Group | Avance Gas vs. Fuji Media 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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