Correlation Between Lincoln Educational and Cogna Educacao
Can any of the company-specific risk be diversified away by investing in both Lincoln Educational and Cogna Educacao 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 Cogna Educacao 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 Cogna Educacao SA, you can compare the effects of market volatilities on Lincoln Educational and Cogna Educacao 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 Cogna Educacao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Educational and Cogna Educacao.
Diversification Opportunities for Lincoln Educational and Cogna Educacao
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and Cogna is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and Cogna Educacao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogna Educacao SA 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 Cogna Educacao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogna Educacao SA has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and Cogna Educacao go up and down completely randomly.
Pair Corralation between Lincoln Educational and Cogna Educacao
Given the investment horizon of 90 days Lincoln Educational Services is expected to generate 0.59 times more return on investment than Cogna Educacao. However, Lincoln Educational Services is 1.69 times less risky than Cogna Educacao. It trades about 0.31 of its potential returns per unit of risk. Cogna Educacao SA is currently generating about 0.03 per unit of risk. If you would invest 1,248 in Lincoln Educational Services on August 24, 2024 and sell it today you would earn a total of 312.00 from holding Lincoln Educational Services or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Educational Services vs. Cogna Educacao SA
Performance |
| Timeline |
| Lincoln Educational |
| Cogna Educacao SA |
Lincoln Educational and Cogna Educacao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Educational and Cogna Educacao
The main advantage of trading using opposite Lincoln Educational and Cogna Educacao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Educational position performs unexpectedly, Cogna Educacao 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 Cogna Educacao will offset losses from the drop in Cogna Educacao'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 |
| Cogna Educacao vs. Universal Technical Institute | Cogna Educacao vs. ATA Creativity Global | Cogna Educacao vs. Sunlands Technology Group | Cogna Educacao vs. Vasta Platform |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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