Correlation Between Lincoln Educational and Falcons Beyond
Can any of the company-specific risk be diversified away by investing in both Lincoln Educational and Falcons Beyond 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 Falcons Beyond 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 Falcons Beyond Global,, you can compare the effects of market volatilities on Lincoln Educational and Falcons Beyond 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 Falcons Beyond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Educational and Falcons Beyond.
Diversification Opportunities for Lincoln Educational and Falcons Beyond
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lincoln and Falcons is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and Falcons Beyond Global, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcons Beyond Global, 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 Falcons Beyond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcons Beyond Global, has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and Falcons Beyond go up and down completely randomly.
Pair Corralation between Lincoln Educational and Falcons Beyond
Given the investment horizon of 90 days Lincoln Educational Services is expected to generate 0.16 times more return on investment than Falcons Beyond. However, Lincoln Educational Services is 6.44 times less risky than Falcons Beyond. It trades about 0.01 of its potential returns per unit of risk. Falcons Beyond Global, is currently generating about -0.19 per unit of risk. If you would invest 1,625 in Lincoln Educational Services on September 14, 2024 and sell it today you would lose (1.00) from holding Lincoln Educational Services or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Lincoln Educational Services vs. Falcons Beyond Global,
Performance |
| Timeline |
| Lincoln Educational |
| Falcons Beyond Global, |
Lincoln Educational and Falcons Beyond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Educational and Falcons Beyond
The main advantage of trading using opposite Lincoln Educational and Falcons Beyond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Educational position performs unexpectedly, Falcons Beyond 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 Falcons Beyond will offset losses from the drop in Falcons Beyond's long position.| Lincoln Educational vs. Laureate Education | Lincoln Educational vs. American Public Education | Lincoln Educational vs. Adtalem Global Education | Lincoln Educational vs. Afya |
| Falcons Beyond vs. Kura Sushi USA | Falcons Beyond vs. Chemours Co | Falcons Beyond vs. Apogee Enterprises | Falcons Beyond vs. The Cheesecake Factory |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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