Correlation Between Lincoln Educational and Postal Realty
Can any of the company-specific risk be diversified away by investing in both Lincoln Educational and Postal Realty 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 Postal Realty 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 Postal Realty Trust, you can compare the effects of market volatilities on Lincoln Educational and Postal Realty 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 Postal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Educational and Postal Realty.
Diversification Opportunities for Lincoln Educational and Postal Realty
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lincoln and Postal is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and Postal Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Realty Trust 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 Postal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Realty Trust has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and Postal Realty go up and down completely randomly.
Pair Corralation between Lincoln Educational and Postal Realty
Given the investment horizon of 90 days Lincoln Educational Services is expected to generate 2.42 times more return on investment than Postal Realty. However, Lincoln Educational is 2.42 times more volatile than Postal Realty Trust. It trades about 0.18 of its potential returns per unit of risk. Postal Realty Trust is currently generating about -0.01 per unit of risk. If you would invest 1,240 in Lincoln Educational Services on August 28, 2024 and sell it today you would earn a total of 395.00 from holding Lincoln Educational Services or generate 31.85% 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. Postal Realty Trust
Performance |
| Timeline |
| Lincoln Educational |
| Postal Realty Trust |
Lincoln Educational and Postal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Educational and Postal Realty
The main advantage of trading using opposite Lincoln Educational and Postal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Educational position performs unexpectedly, Postal Realty 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 Postal Realty will offset losses from the drop in Postal Realty's long position.The idea behind Lincoln Educational Services and Postal Realty Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Postal Realty vs. Office Properties Income | Postal Realty vs. Boston Properties | Postal Realty vs. SL Green Realty | Postal Realty vs. Alexandria Real Estate |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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