Correlation Between Lincoln Educational and Adtalem Global
Can any of the company-specific risk be diversified away by investing in both Lincoln Educational and Adtalem Global 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 Adtalem Global 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 Adtalem Global Education, you can compare the effects of market volatilities on Lincoln Educational and Adtalem Global 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 Adtalem Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Educational and Adtalem Global.
Diversification Opportunities for Lincoln Educational and Adtalem Global
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lincoln and Adtalem is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and Adtalem Global Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adtalem Global Education 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 Adtalem Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adtalem Global Education has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and Adtalem Global go up and down completely randomly.
Pair Corralation between Lincoln Educational and Adtalem Global
Given the investment horizon of 90 days Lincoln Educational is expected to generate 1.03 times less return on investment than Adtalem Global. In addition to that, Lincoln Educational is 1.17 times more volatile than Adtalem Global Education. It trades about 0.1 of its total potential returns per unit of risk. Adtalem Global Education is currently generating about 0.12 per unit of volatility. If you would invest 6,614 in Adtalem Global Education on August 24, 2024 and sell it today you would earn a total of 2,268 from holding Adtalem Global Education or generate 34.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Educational Services vs. Adtalem Global Education
Performance |
| Timeline |
| Lincoln Educational |
| Adtalem Global Education |
Lincoln Educational and Adtalem Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Educational and Adtalem Global
The main advantage of trading using opposite Lincoln Educational and Adtalem Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Educational position performs unexpectedly, Adtalem Global 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 Adtalem Global will offset losses from the drop in Adtalem Global'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 |
| Adtalem Global vs. Grand Canyon Education | Adtalem Global vs. Afya | Adtalem Global vs. Bright Scholar Education | Adtalem Global vs. Laureate 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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