Correlation Between Lamar Advertising and Heineken
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and Heineken 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 Heineken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and Heineken NV, you can compare the effects of market volatilities on Lamar Advertising and Heineken 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 Heineken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and Heineken.
Diversification Opportunities for Lamar Advertising and Heineken
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lamar and Heineken is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and Heineken NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken NV 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 Heineken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken NV has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and Heineken go up and down completely randomly.
Pair Corralation between Lamar Advertising and Heineken
Assuming the 90 days trading horizon Lamar Advertising is expected to generate 12.5 times less return on investment than Heineken. But when comparing it to its historical volatility, Lamar Advertising is 1.6 times less risky than Heineken. It trades about 0.02 of its potential returns per unit of risk. Heineken NV is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 6,882 in Heineken NV on November 30, 2024 and sell it today you would earn a total of 1,196 from holding Heineken NV or generate 17.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamar Advertising vs. Heineken NV
Performance |
| Timeline |
| Lamar Advertising |
| Heineken NV |
Lamar Advertising and Heineken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and Heineken
The main advantage of trading using opposite Lamar Advertising and Heineken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, Heineken 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 Heineken will offset losses from the drop in Heineken's long position.| Lamar Advertising vs. Virtu Financial | Lamar Advertising vs. MOLSON RS BEVERAGE | Lamar Advertising vs. CHINA TONTINE WINES | Lamar Advertising vs. REVO INSURANCE SPA |
| Heineken vs. Carnegie Clean Energy | Heineken vs. RYU Apparel | Heineken vs. JD SPORTS FASH | Heineken vs. Transportadora de Gas |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |