Correlation Between MYFAIR GOLD and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both MYFAIR GOLD 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 MYFAIR GOLD and Lamar Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYFAIR GOLD P and Lamar Advertising, you can compare the effects of market volatilities on MYFAIR GOLD 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 MYFAIR GOLD with a short position of Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYFAIR GOLD and Lamar Advertising.
Diversification Opportunities for MYFAIR GOLD and Lamar Advertising
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MYFAIR and Lamar is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MYFAIR GOLD P and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising and MYFAIR GOLD 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 MYFAIR GOLD P 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 MYFAIR GOLD i.e., MYFAIR GOLD and Lamar Advertising go up and down completely randomly.
Pair Corralation between MYFAIR GOLD and Lamar Advertising
Assuming the 90 days horizon MYFAIR GOLD P is expected to under-perform the Lamar Advertising. In addition to that, MYFAIR GOLD is 5.28 times more volatile than Lamar Advertising. It trades about -0.03 of its total potential returns per unit of risk. Lamar Advertising is currently generating about 0.09 per unit of volatility. 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MYFAIR GOLD P vs. Lamar Advertising
Performance |
| Timeline |
| MYFAIR GOLD P |
| Lamar Advertising |
MYFAIR GOLD and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYFAIR GOLD and Lamar Advertising
The main advantage of trading using opposite MYFAIR GOLD and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYFAIR GOLD 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.| MYFAIR GOLD vs. Franco Nevada | MYFAIR GOLD vs. Superior Plus Corp | MYFAIR GOLD vs. SIVERS SEMICONDUCTORS AB | MYFAIR GOLD vs. Norsk Hydro ASA |
| Lamar Advertising vs. MYFAIR GOLD P | Lamar Advertising vs. INTER CARS SA | Lamar Advertising vs. Corsair Gaming | Lamar Advertising vs. WIZZ AIR HLDGUNSPADR4 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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