Correlation Between Lincoln Educational and Arco Platform
Can any of the company-specific risk be diversified away by investing in both Lincoln Educational and Arco Platform 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 Lincoln Educational and Arco Platform into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lincoln Educational Services and Arco Platform, you can compare the effects of market volatilities on Lincoln Educational and Arco Platform 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 Lincoln Educational with a short position of Arco Platform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Educational and Arco Platform.
Diversification Opportunities for Lincoln Educational and Arco Platform
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lincoln and Arco is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and Arco Platform in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arco Platform and Lincoln Educational 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 Lincoln Educational Services are associated (or correlated) with Arco Platform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arco Platform has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and Arco Platform go up and down completely randomly.
Pair Corralation between Lincoln Educational and Arco Platform
If you would invest 903.00 in Lincoln Educational Services on August 24, 2024 and sell it today you would earn a total of 716.00 from holding Lincoln Educational Services or generate 79.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Lincoln Educational Services vs. Arco Platform
Performance |
| Timeline |
| Lincoln Educational |
| Arco Platform |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lincoln Educational and Arco Platform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Educational and Arco Platform
The main advantage of trading using opposite Lincoln Educational and Arco Platform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Educational position performs unexpectedly, Arco Platform 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 Arco Platform will offset losses from the drop in Arco Platform's long position.| Lincoln Educational vs. Vasta Platform | Lincoln Educational vs. Laureate Education | Lincoln Educational vs. American Public Education | Lincoln Educational vs. Adtalem Global Education |
| Arco Platform vs. Adtalem Global Education | Arco Platform vs. American Public Education | Arco Platform vs. Laureate Education | Arco Platform vs. Grand Canyon Education |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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