Correlation Between SCIENCE IN and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both SCIENCE IN and Lamar Advertising 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 SCIENCE IN and Lamar Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCIENCE IN SPORT and Lamar Advertising, you can compare the effects of market volatilities on SCIENCE IN and Lamar Advertising 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 SCIENCE IN with a short position of Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCIENCE IN and Lamar Advertising.
Diversification Opportunities for SCIENCE IN and Lamar Advertising
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between SCIENCE and Lamar is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SCIENCE IN SPORT and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising and SCIENCE IN 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 SCIENCE IN SPORT are associated (or correlated) with Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of SCIENCE IN i.e., SCIENCE IN and Lamar Advertising go up and down completely randomly.
Pair Corralation between SCIENCE IN and Lamar Advertising
Assuming the 90 days horizon SCIENCE IN SPORT is expected to generate 3.84 times more return on investment than Lamar Advertising. However, SCIENCE IN is 3.84 times more volatile than Lamar Advertising. It trades about -0.01 of its potential returns per unit of risk. Lamar Advertising is currently generating about -0.23 per unit of risk. If you would invest 30.00 in SCIENCE IN SPORT on October 13, 2024 and sell it today you would lose (1.00) from holding SCIENCE IN SPORT or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
SCIENCE IN SPORT vs. Lamar Advertising
Performance |
| Timeline |
| SCIENCE IN SPORT |
| Lamar Advertising |
SCIENCE IN and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCIENCE IN and Lamar Advertising
The main advantage of trading using opposite SCIENCE IN and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCIENCE IN position performs unexpectedly, Lamar Advertising 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 Lamar Advertising will offset losses from the drop in Lamar Advertising's long position.| SCIENCE IN vs. Seven West Media | SCIENCE IN vs. Synchrony Financial | SCIENCE IN vs. Flutter Entertainment PLC | SCIENCE IN vs. PROSIEBENSAT1 MEDIADR4 |
| Lamar Advertising vs. Waste Management | Lamar Advertising vs. Penn National Gaming | Lamar Advertising vs. GAMESTOP | Lamar Advertising vs. Cleanaway Waste Management |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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