Correlation Between Lincoln Educational and Shengkai Innovations
Can any of the company-specific risk be diversified away by investing in both Lincoln Educational and Shengkai Innovations 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 Shengkai Innovations 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 Shengkai Innovations, you can compare the effects of market volatilities on Lincoln Educational and Shengkai Innovations 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 Shengkai Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Educational and Shengkai Innovations.
Diversification Opportunities for Lincoln Educational and Shengkai Innovations
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lincoln and Shengkai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and Shengkai Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengkai Innovations 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 Shengkai Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengkai Innovations has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and Shengkai Innovations go up and down completely randomly.
Pair Corralation between Lincoln Educational and Shengkai Innovations
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 | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Lincoln Educational Services vs. Shengkai Innovations
Performance |
| Timeline |
| Lincoln Educational |
| Shengkai Innovations |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lincoln Educational and Shengkai Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Educational and Shengkai Innovations
The main advantage of trading using opposite Lincoln Educational and Shengkai Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Educational position performs unexpectedly, Shengkai Innovations 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 Shengkai Innovations will offset losses from the drop in Shengkai Innovations' long position.| Lincoln Educational vs. Laureate Education | Lincoln Educational vs. American Public Education | Lincoln Educational vs. Adtalem Global Education | Lincoln Educational vs. Afya |
| Shengkai Innovations vs. Bright Scholar Education | Shengkai Innovations vs. Lincoln Educational Services | Shengkai Innovations vs. Ihuman Inc | Shengkai Innovations vs. Universal Technical Institute |
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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