Correlation Between Lamar Advertising and Takeda Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and Takeda Pharmaceutical 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 Takeda Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and Takeda Pharmaceutical, you can compare the effects of market volatilities on Lamar Advertising and Takeda Pharmaceutical 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 Takeda Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and Takeda Pharmaceutical.
Diversification Opportunities for Lamar Advertising and Takeda Pharmaceutical
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lamar and Takeda is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and Takeda Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takeda Pharmaceutical 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 Takeda Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takeda Pharmaceutical has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and Takeda Pharmaceutical go up and down completely randomly.
Pair Corralation between Lamar Advertising and Takeda Pharmaceutical
Assuming the 90 days trading horizon Lamar Advertising is expected to generate 0.81 times more return on investment than Takeda Pharmaceutical. However, Lamar Advertising is 1.23 times less risky than Takeda Pharmaceutical. It trades about 0.08 of its potential returns per unit of risk. Takeda Pharmaceutical is currently generating about 0.07 per unit of risk. If you would invest 12,100 in Lamar Advertising on September 14, 2024 and sell it today you would earn a total of 200.00 from holding Lamar Advertising or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamar Advertising vs. Takeda Pharmaceutical
Performance |
| Timeline |
| Lamar Advertising |
| Takeda Pharmaceutical |
Lamar Advertising and Takeda Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and Takeda Pharmaceutical
The main advantage of trading using opposite Lamar Advertising and Takeda Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, Takeda Pharmaceutical 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 Takeda Pharmaceutical will offset losses from the drop in Takeda Pharmaceutical's long position.| Lamar Advertising vs. Microbot Medical | Lamar Advertising vs. BII Railway Transportation | Lamar Advertising vs. SAFETY MEDICAL PROD | Lamar Advertising vs. CVR Medical Corp |
| Takeda Pharmaceutical vs. Lamar Advertising | Takeda Pharmaceutical vs. BROADSTNET LEADL 00025 | Takeda Pharmaceutical vs. COPLAND ROAD CAPITAL | Takeda Pharmaceutical vs. Gold Road Resources |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance |