Correlation Between GAZTRTECHNIUADR15EO01 and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both GAZTRTECHNIUADR15EO01 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 GAZTRTECHNIUADR15EO01 and Lamar Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAZTRTECHNIUADR15EO01 and Lamar Advertising, you can compare the effects of market volatilities on GAZTRTECHNIUADR15EO01 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 GAZTRTECHNIUADR15EO01 with a short position of Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAZTRTECHNIUADR15EO01 and Lamar Advertising.
Diversification Opportunities for GAZTRTECHNIUADR15EO01 and Lamar Advertising
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GAZTRTECHNIUADR15EO01 and Lamar is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GAZTRTECHNIUADR15EO01 and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising and GAZTRTECHNIUADR15EO01 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 GAZTRTECHNIUADR15EO01 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 GAZTRTECHNIUADR15EO01 i.e., GAZTRTECHNIUADR15EO01 and Lamar Advertising go up and down completely randomly.
Pair Corralation between GAZTRTECHNIUADR15EO01 and Lamar Advertising
Assuming the 90 days trading horizon GAZTRTECHNIUADR15EO01 is expected to generate 1.76 times more return on investment than Lamar Advertising. However, GAZTRTECHNIUADR15EO01 is 1.76 times more volatile than Lamar Advertising. It trades about 0.34 of its potential returns per unit of risk. Lamar Advertising is currently generating about 0.09 per unit of risk. If you would invest 2,520 in GAZTRTECHNIUADR15EO01 on October 25, 2024 and sell it today you would earn a total of 320.00 from holding GAZTRTECHNIUADR15EO01 or generate 12.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAZTRTECHNIUADR15EO01 vs. Lamar Advertising
Performance |
| Timeline |
| GAZTRTECHNIUADR15EO01 |
| Lamar Advertising |
GAZTRTECHNIUADR15EO01 and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAZTRTECHNIUADR15EO01 and Lamar Advertising
The main advantage of trading using opposite GAZTRTECHNIUADR15EO01 and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAZTRTECHNIUADR15EO01 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.| GAZTRTECHNIUADR15EO01 vs. Apple Inc | GAZTRTECHNIUADR15EO01 vs. Apple Inc | GAZTRTECHNIUADR15EO01 vs. Apple Inc | GAZTRTECHNIUADR15EO01 vs. Apple Inc |
| Lamar Advertising vs. Telecom Argentina SA | Lamar Advertising vs. Spirent Communications plc | Lamar Advertising vs. Harmony Gold Mining | Lamar Advertising vs. Iridium Communications |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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