Correlation Between Lamar Advertising and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and Goldman Sachs 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 Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and The Goldman Sachs, you can compare the effects of market volatilities on Lamar Advertising and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and Goldman Sachs.
Diversification Opportunities for Lamar Advertising and Goldman Sachs
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lamar and Goldman is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and Goldman Sachs go up and down completely randomly.
Pair Corralation between Lamar Advertising and Goldman Sachs
Assuming the 90 days trading horizon Lamar Advertising is expected to under-perform the Goldman Sachs. In addition to that, Lamar Advertising is 1.05 times more volatile than The Goldman Sachs. It trades about -0.23 of its total potential returns per unit of risk. The Goldman Sachs is currently generating about -0.1 per unit of volatility. If you would invest 56,140 in The Goldman Sachs on October 13, 2024 and sell it today you would lose (1,430) from holding The Goldman Sachs or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Lamar Advertising vs. The Goldman Sachs
Performance |
| Timeline |
| Lamar Advertising |
| Goldman Sachs |
Lamar Advertising and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and Goldman Sachs
The main advantage of trading using opposite Lamar Advertising and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Lamar Advertising vs. Waste Management | Lamar Advertising vs. Penn National Gaming | Lamar Advertising vs. GAMESTOP | Lamar Advertising vs. Cleanaway Waste Management |
| Goldman Sachs vs. Yuexiu Transport Infrastructure | Goldman Sachs vs. DICKS Sporting Goods | Goldman Sachs vs. SPORT LISBOA E | Goldman Sachs vs. Lamar Advertising |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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