Correlation Between Lincoln Educational and Valens
Can any of the company-specific risk be diversified away by investing in both Lincoln Educational and Valens 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 Valens 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 Valens, you can compare the effects of market volatilities on Lincoln Educational and Valens 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 Valens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Educational and Valens.
Diversification Opportunities for Lincoln Educational and Valens
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lincoln and Valens is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and Valens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valens 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 Valens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valens has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and Valens go up and down completely randomly.
Pair Corralation between Lincoln Educational and Valens
Given the investment horizon of 90 days Lincoln Educational is expected to generate 1.4 times less return on investment than Valens. But when comparing it to its historical volatility, Lincoln Educational Services is 1.68 times less risky than Valens. It trades about 0.29 of its potential returns per unit of risk. Valens is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 178.00 in Valens on September 4, 2024 and sell it today you would earn a total of 51.00 from holding Valens or generate 28.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lincoln Educational Services vs. Valens
Performance |
| Timeline |
| Lincoln Educational |
| Valens |
Lincoln Educational and Valens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lincoln Educational and Valens
The main advantage of trading using opposite Lincoln Educational and Valens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Educational position performs unexpectedly, Valens 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 Valens will offset losses from the drop in Valens' long position.| Lincoln Educational vs. Vasta Platform | Lincoln Educational vs. Laureate Education | Lincoln Educational vs. American Public Education | Lincoln Educational vs. Adtalem Global Education |
| Valens vs. Wolfspeed | Valens vs. GSI Technology | Valens vs. Lattice Semiconductor | Valens vs. ON Semiconductor |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |