Correlation Between ALERION CLEANPOWER and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both ALERION CLEANPOWER 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 ALERION CLEANPOWER and Lamar Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALERION CLEANPOWER and Lamar Advertising, you can compare the effects of market volatilities on ALERION CLEANPOWER 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 ALERION CLEANPOWER with a short position of Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALERION CLEANPOWER and Lamar Advertising.
Diversification Opportunities for ALERION CLEANPOWER and Lamar Advertising
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ALERION and Lamar is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ALERION CLEANPOWER and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising and ALERION CLEANPOWER 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 ALERION CLEANPOWER 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 ALERION CLEANPOWER i.e., ALERION CLEANPOWER and Lamar Advertising go up and down completely randomly.
Pair Corralation between ALERION CLEANPOWER and Lamar Advertising
Assuming the 90 days trading horizon ALERION CLEANPOWER is expected to under-perform the Lamar Advertising. In addition to that, ALERION CLEANPOWER is 1.57 times more volatile than Lamar Advertising. It trades about -0.3 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 11,700 in Lamar Advertising on November 3, 2024 and sell it today you would earn a total of 400.00 from holding Lamar Advertising or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALERION CLEANPOWER vs. Lamar Advertising
Performance |
| Timeline |
| ALERION CLEANPOWER |
| Lamar Advertising |
ALERION CLEANPOWER and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALERION CLEANPOWER and Lamar Advertising
The main advantage of trading using opposite ALERION CLEANPOWER and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALERION CLEANPOWER 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.| ALERION CLEANPOWER vs. ON SEMICONDUCTOR | ALERION CLEANPOWER vs. Apollo Medical Holdings | ALERION CLEANPOWER vs. Peijia Medical Limited | ALERION CLEANPOWER vs. BE Semiconductor Industries |
| Lamar Advertising vs. HOCHSCHILD MINING | Lamar Advertising vs. Media and Games | Lamar Advertising vs. Scientific Games | Lamar Advertising vs. DETALION GAMES SA |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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