Correlation Between Lincoln Educational and Four Seasons
Can any of the company-specific risk be diversified away by investing in both Lincoln Educational and Four Seasons 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 Four Seasons 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 Four Seasons Education, you can compare the effects of market volatilities on Lincoln Educational and Four Seasons 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 Four Seasons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Educational and Four Seasons.
Diversification Opportunities for Lincoln Educational and Four Seasons
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lincoln and Four is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and Four Seasons Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Seasons 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 Four Seasons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Seasons Education has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and Four Seasons go up and down completely randomly.
Pair Corralation between Lincoln Educational and Four Seasons
Given the investment horizon of 90 days Lincoln Educational Services is expected to generate 1.73 times more return on investment than Four Seasons. However, Lincoln Educational is 1.73 times more volatile than Four Seasons Education. It trades about 0.34 of its potential returns per unit of risk. Four Seasons Education is currently generating about -0.24 per unit of risk. If you would invest 1,281 in Lincoln Educational Services on August 27, 2024 and sell it today you would earn a total of 334.00 from holding Lincoln Educational Services or generate 26.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Educational Services vs. Four Seasons Education
Performance |
| Timeline |
| Lincoln Educational |
| Four Seasons Education |
Lincoln Educational and Four Seasons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Educational and Four Seasons
The main advantage of trading using opposite Lincoln Educational and Four Seasons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Educational position performs unexpectedly, Four Seasons 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 Four Seasons will offset losses from the drop in Four Seasons' long position.| Lincoln Educational vs. Vasta Platform | Lincoln Educational vs. Laureate Education | Lincoln Educational vs. American Public Education | Lincoln Educational vs. Adtalem Global Education |
| Four Seasons vs. American Public Education | Four Seasons vs. Lincoln Educational Services | Four Seasons vs. Adtalem Global 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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