Correlation Between AKITA Drilling and Lincoln Educational
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Lincoln Educational 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 AKITA Drilling and Lincoln Educational into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and Lincoln Educational Services, you can compare the effects of market volatilities on AKITA Drilling and Lincoln Educational 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 AKITA Drilling with a short position of Lincoln Educational. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Lincoln Educational.
Diversification Opportunities for AKITA Drilling and Lincoln Educational
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AKITA and Lincoln is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Lincoln Educational Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Educational and AKITA Drilling 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 AKITA Drilling are associated (or correlated) with Lincoln Educational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Educational has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Lincoln Educational go up and down completely randomly.
Pair Corralation between AKITA Drilling and Lincoln Educational
Assuming the 90 days horizon AKITA Drilling is expected to generate 2.6 times less return on investment than Lincoln Educational. In addition to that, AKITA Drilling is 1.03 times more volatile than Lincoln Educational Services. It trades about 0.03 of its total potential returns per unit of risk. Lincoln Educational Services is currently generating about 0.09 per unit of volatility. If you would invest 986.00 in Lincoln Educational Services on September 14, 2024 and sell it today you would earn a total of 615.50 from holding Lincoln Educational Services or generate 62.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKITA Drilling vs. Lincoln Educational Services
Performance |
| Timeline |
| AKITA Drilling |
| Lincoln Educational |
AKITA Drilling and Lincoln Educational Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and Lincoln Educational
The main advantage of trading using opposite AKITA Drilling and Lincoln Educational positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, Lincoln Educational 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 Lincoln Educational will offset losses from the drop in Lincoln Educational's long position.| AKITA Drilling vs. Cathedral Energy Services | AKITA Drilling vs. Vantage Drilling International | AKITA Drilling vs. Seadrill Limited | AKITA Drilling vs. Noble plc |
| Lincoln Educational vs. Laureate Education | Lincoln Educational vs. American Public Education | Lincoln Educational vs. Adtalem Global Education | Lincoln Educational vs. Afya |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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