Correlation Between Lamar Advertising and Hon Hai
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and Hon Hai 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 Hon Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and Hon Hai Precision, you can compare the effects of market volatilities on Lamar Advertising and Hon Hai 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 Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and Hon Hai.
Diversification Opportunities for Lamar Advertising and Hon Hai
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lamar and Hon is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and Hon Hai Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hon Hai Precision 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 Hon Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hon Hai Precision has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and Hon Hai go up and down completely randomly.
Pair Corralation between Lamar Advertising and Hon Hai
Assuming the 90 days trading horizon Lamar Advertising is expected to generate 2.75 times less return on investment than Hon Hai. But when comparing it to its historical volatility, Lamar Advertising is 2.89 times less risky than Hon Hai. It trades about 0.09 of its potential returns per unit of risk. Hon Hai Precision is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 579.00 in Hon Hai Precision on October 29, 2024 and sell it today you would earn a total of 501.00 from holding Hon Hai Precision or generate 86.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.6% |
Values | Daily Returns |
Lamar Advertising vs. Hon Hai Precision
Performance |
Timeline |
Lamar Advertising |
Hon Hai Precision |
Lamar Advertising and Hon Hai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lamar Advertising and Hon Hai
The main advantage of trading using opposite Lamar Advertising and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, Hon Hai 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 Hon Hai will offset losses from the drop in Hon Hai's long position.Lamar Advertising vs. Charter Communications | Lamar Advertising vs. Cairo Communication SpA | Lamar Advertising vs. Virtus Investment Partners | Lamar Advertising vs. AOYAMA TRADING |
Hon Hai vs. Compagnie Plastic Omnium | Hon Hai vs. Martin Marietta Materials | Hon Hai vs. APPLIED MATERIALS | Hon Hai vs. Easy Software AG |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |