Correlation Between Lamar Advertising and QURATE RETAIL
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and QURATE RETAIL 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 QURATE RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and QURATE RETAIL INC, you can compare the effects of market volatilities on Lamar Advertising and QURATE RETAIL 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 QURATE RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and QURATE RETAIL.
Diversification Opportunities for Lamar Advertising and QURATE RETAIL
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lamar and QURATE is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and QURATE RETAIL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QURATE RETAIL INC 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 QURATE RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QURATE RETAIL INC has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and QURATE RETAIL go up and down completely randomly.
Pair Corralation between Lamar Advertising and QURATE RETAIL
Assuming the 90 days trading horizon Lamar Advertising is expected to generate 0.48 times more return on investment than QURATE RETAIL. However, Lamar Advertising is 2.1 times less risky than QURATE RETAIL. It trades about 0.13 of its potential returns per unit of risk. QURATE RETAIL INC is currently generating about -0.08 per unit of risk. If you would invest 12,100 in Lamar Advertising on September 4, 2024 and sell it today you would earn a total of 600.00 from holding Lamar Advertising or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lamar Advertising vs. QURATE RETAIL INC
Performance |
| Timeline |
| Lamar Advertising |
| QURATE RETAIL INC |
Lamar Advertising and QURATE RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and QURATE RETAIL
The main advantage of trading using opposite Lamar Advertising and QURATE RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, QURATE RETAIL 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 QURATE RETAIL will offset losses from the drop in QURATE RETAIL's long position.| Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc |
| QURATE RETAIL vs. Consolidated Communications Holdings | QURATE RETAIL vs. COMPUTERSHARE | QURATE RETAIL vs. Chunghwa Telecom Co | QURATE RETAIL vs. Westlake Chemical |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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