Correlation Between Kinepolis Group and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both Kinepolis Group 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 Kinepolis Group and Lamar Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinepolis Group NV and Lamar Advertising, you can compare the effects of market volatilities on Kinepolis Group 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 Kinepolis Group with a short position of Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinepolis Group and Lamar Advertising.
Diversification Opportunities for Kinepolis Group and Lamar Advertising
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinepolis and Lamar is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kinepolis Group NV and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising and Kinepolis Group 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 Kinepolis Group NV 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 Kinepolis Group i.e., Kinepolis Group and Lamar Advertising go up and down completely randomly.
Pair Corralation between Kinepolis Group and Lamar Advertising
Assuming the 90 days trading horizon Kinepolis Group NV is expected to under-perform the Lamar Advertising. In addition to that, Kinepolis Group is 1.69 times more volatile than Lamar Advertising. It trades about -0.08 of its total potential returns per unit of risk. Lamar Advertising is currently generating about 0.08 per unit of volatility. If you would invest 12,100 in Lamar Advertising on September 13, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinepolis Group NV vs. Lamar Advertising
Performance |
| Timeline |
| Kinepolis Group NV |
| Lamar Advertising |
Kinepolis Group and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinepolis Group and Lamar Advertising
The main advantage of trading using opposite Kinepolis Group and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinepolis Group 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.| Kinepolis Group vs. SPARTAN STORES | Kinepolis Group vs. BURLINGTON STORES | Kinepolis Group vs. BOSTON BEER A | Kinepolis Group vs. Fast Retailing Co |
| Lamar Advertising vs. Microbot Medical | Lamar Advertising vs. BII Railway Transportation | Lamar Advertising vs. SAFETY MEDICAL PROD | Lamar Advertising vs. CVR Medical Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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