Correlation Between Lincoln Educational and HNI Corp
Can any of the company-specific risk be diversified away by investing in both Lincoln Educational and HNI Corp 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 HNI Corp 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 HNI Corp, you can compare the effects of market volatilities on Lincoln Educational and HNI Corp 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 HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Educational and HNI Corp.
Diversification Opportunities for Lincoln Educational and HNI Corp
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lincoln and HNI is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp 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 HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and HNI Corp go up and down completely randomly.
Pair Corralation between Lincoln Educational and HNI Corp
Given the investment horizon of 90 days Lincoln Educational Services is expected to generate 1.4 times more return on investment than HNI Corp. However, Lincoln Educational is 1.4 times more volatile than HNI Corp. It trades about 0.1 of its potential returns per unit of risk. HNI Corp is currently generating about 0.11 per unit of risk. If you would invest 1,187 in Lincoln Educational Services on August 24, 2024 and sell it today you would earn a total of 373.00 from holding Lincoln Educational Services or generate 31.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Educational Services vs. HNI Corp
Performance |
| Timeline |
| Lincoln Educational |
| HNI Corp |
Lincoln Educational and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Educational and HNI Corp
The main advantage of trading using opposite Lincoln Educational and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Educational position performs unexpectedly, HNI Corp 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 HNI Corp will offset losses from the drop in HNI Corp'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 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |