Correlation Between Lamar Advertising and AFC Gamma
Can any of the company-specific risk be diversified away by investing in both Lamar Advertising and AFC Gamma 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 Lamar Advertising and AFC Gamma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lamar Advertising and AFC Gamma, you can compare the effects of market volatilities on Lamar Advertising and AFC Gamma 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 Lamar Advertising with a short position of AFC Gamma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lamar Advertising and AFC Gamma.
Diversification Opportunities for Lamar Advertising and AFC Gamma
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lamar and AFC is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and AFC Gamma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Gamma and Lamar Advertising 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 Lamar Advertising are associated (or correlated) with AFC Gamma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Gamma has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and AFC Gamma go up and down completely randomly.
Pair Corralation between Lamar Advertising and AFC Gamma
Given the investment horizon of 90 days Lamar Advertising is expected to generate 0.71 times more return on investment than AFC Gamma. However, Lamar Advertising is 1.4 times less risky than AFC Gamma. It trades about 0.01 of its potential returns per unit of risk. AFC Gamma is currently generating about -0.08 per unit of risk. If you would invest 13,327 in Lamar Advertising on August 28, 2024 and sell it today you would earn a total of 15.00 from holding Lamar Advertising or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lamar Advertising vs. AFC Gamma
Performance |
| Timeline |
| Lamar Advertising |
| AFC Gamma |
Lamar Advertising and AFC Gamma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lamar Advertising and AFC Gamma
The main advantage of trading using opposite Lamar Advertising and AFC Gamma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lamar Advertising position performs unexpectedly, AFC Gamma 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 AFC Gamma will offset losses from the drop in AFC Gamma's long position.| Lamar Advertising vs. Broadstone Net Lease | Lamar Advertising vs. Armada Hflr Pr | Lamar Advertising vs. Brightspire Capital | Lamar Advertising vs. Safehold |
| AFC Gamma vs. Newlake Capital Partners | AFC Gamma vs. SBA Communications Corp | AFC Gamma vs. Gladstone Land | AFC Gamma vs. Lamar Advertising |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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