Correlation Between Lincoln Educational and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both Lincoln Educational and Beyond Meat 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 Beyond Meat 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 Beyond Meat, you can compare the effects of market volatilities on Lincoln Educational and Beyond Meat 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 Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Educational and Beyond Meat.
Diversification Opportunities for Lincoln Educational and Beyond Meat
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and Beyond is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and Beyond Meat go up and down completely randomly.
Pair Corralation between Lincoln Educational and Beyond Meat
Given the investment horizon of 90 days Lincoln Educational Services is expected to generate 0.53 times more return on investment than Beyond Meat. However, Lincoln Educational Services is 1.88 times less risky than Beyond Meat. It trades about 0.1 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.02 per unit of risk. If you would invest 565.00 in Lincoln Educational Services on September 4, 2024 and sell it today you would earn a total of 1,083 from holding Lincoln Educational Services or generate 191.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Educational Services vs. Beyond Meat
Performance |
| Timeline |
| Lincoln Educational |
| Beyond Meat |
Lincoln Educational and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Educational and Beyond Meat
The main advantage of trading using opposite Lincoln Educational and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Educational position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat'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 |
| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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