Correlation Between EIDESVIK OFFSHORE and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE and Lamar Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EIDESVIK OFFSHORE NK and Lamar Advertising, you can compare the effects of market volatilities on EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE with a short position of Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and Lamar Advertising.
Diversification Opportunities for EIDESVIK OFFSHORE and Lamar Advertising
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EIDESVIK and Lamar is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK 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 EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and Lamar Advertising go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and Lamar Advertising
Assuming the 90 days horizon EIDESVIK OFFSHORE NK is expected to under-perform the Lamar Advertising. In addition to that, EIDESVIK OFFSHORE is 1.89 times more volatile than Lamar Advertising. It trades about -0.11 of its total potential returns per unit of risk. Lamar Advertising is currently generating about 0.15 per unit of volatility. If you would invest 11,164 in Lamar Advertising on August 31, 2024 and sell it today you would earn a total of 1,436 from holding Lamar Advertising or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. Lamar Advertising
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| Lamar Advertising |
EIDESVIK OFFSHORE and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and Lamar Advertising
The main advantage of trading using opposite EIDESVIK OFFSHORE and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE 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.| EIDESVIK OFFSHORE vs. Iridium Communications | EIDESVIK OFFSHORE vs. SBA Communications Corp | EIDESVIK OFFSHORE vs. United Airlines Holdings | EIDESVIK OFFSHORE vs. JAPAN AIRLINES |
| Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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