Correlation Between Lamar Advertising and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and SBI Insurance 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 SBI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and SBI Insurance Group, you can compare the effects of market volatilities on Lamar Advertising and SBI Insurance 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and SBI Insurance.
Diversification Opportunities for Lamar Advertising and SBI Insurance
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lamar and SBI is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and SBI Insurance go up and down completely randomly.
Pair Corralation between Lamar Advertising and SBI Insurance
Assuming the 90 days trading horizon Lamar Advertising is expected to generate 1.94 times less return on investment than SBI Insurance. But when comparing it to its historical volatility, Lamar Advertising is 1.19 times less risky than SBI Insurance. It trades about 0.12 of its potential returns per unit of risk. SBI Insurance Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 645.00 in SBI Insurance Group on November 7, 2024 and sell it today you would earn a total of 30.00 from holding SBI Insurance Group or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Lamar Advertising vs. SBI Insurance Group
Performance |
| Timeline |
| Lamar Advertising |
| SBI Insurance Group |
Lamar Advertising and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and SBI Insurance
The main advantage of trading using opposite Lamar Advertising and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| Lamar Advertising vs. Commercial Vehicle Group | Lamar Advertising vs. VIRGIN WINES UK | Lamar Advertising vs. INTER CARS SA | Lamar Advertising vs. COMMERCIAL VEHICLE |
| SBI Insurance vs. Summit Hotel Properties | SBI Insurance vs. Sunstone Hotel Investors | SBI Insurance vs. Choice Hotels International | SBI Insurance vs. PPHE HOTEL GROUP |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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