Correlation Between Lamar Advertising and G-III APPAREL
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and G-III APPAREL 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 G-III APPAREL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and G III APPAREL GROUP, you can compare the effects of market volatilities on Lamar Advertising and G-III APPAREL 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 G-III APPAREL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and G-III APPAREL.
Diversification Opportunities for Lamar Advertising and G-III APPAREL
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lamar and G-III is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and G III APPAREL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III APPAREL 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 G-III APPAREL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III APPAREL has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and G-III APPAREL go up and down completely randomly.
Pair Corralation between Lamar Advertising and G-III APPAREL
Assuming the 90 days trading horizon Lamar Advertising is expected to generate 0.83 times more return on investment than G-III APPAREL. However, Lamar Advertising is 1.2 times less risky than G-III APPAREL. It trades about 0.09 of its potential returns per unit of risk. G III APPAREL GROUP is currently generating about -0.02 per unit of risk. If you would invest 12,200 in Lamar Advertising on September 1, 2024 and sell it today you would earn a total of 400.00 from holding Lamar Advertising or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lamar Advertising vs. G III APPAREL GROUP
Performance |
| Timeline |
| Lamar Advertising |
| G III APPAREL |
Lamar Advertising and G-III APPAREL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and G-III APPAREL
The main advantage of trading using opposite Lamar Advertising and G-III APPAREL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, G-III APPAREL 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 G-III APPAREL will offset losses from the drop in G-III APPAREL's long position.| Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc |
| G-III APPAREL vs. Gamma Communications plc | G-III APPAREL vs. Eastman Chemical | G-III APPAREL vs. TIANDE CHEMICAL | G-III APPAREL vs. KRISPY KREME DL 01 |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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