Correlation Between TRADEGATE and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both TRADEGATE and Lamar Advertising 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 TRADEGATE and Lamar Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEGATE and Lamar Advertising, you can compare the effects of market volatilities on TRADEGATE and Lamar Advertising 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 TRADEGATE with a short position of Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEGATE and Lamar Advertising.
Diversification Opportunities for TRADEGATE and Lamar Advertising
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TRADEGATE and Lamar is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding TRADEGATE and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising and TRADEGATE 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 TRADEGATE are associated (or correlated) with Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of TRADEGATE i.e., TRADEGATE and Lamar Advertising go up and down completely randomly.
Pair Corralation between TRADEGATE and Lamar Advertising
Assuming the 90 days trading horizon TRADEGATE is expected to under-perform the Lamar Advertising. But the stock apears to be less risky and, when comparing its historical volatility, TRADEGATE is 1.1 times less risky than Lamar Advertising. The stock trades about -0.06 of its potential returns per unit of risk. The Lamar Advertising is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,382 in Lamar Advertising on November 3, 2024 and sell it today you would earn a total of 2,718 from holding Lamar Advertising or generate 28.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRADEGATE vs. Lamar Advertising
Performance |
| Timeline |
| TRADEGATE |
| Lamar Advertising |
TRADEGATE and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEGATE and Lamar Advertising
The main advantage of trading using opposite TRADEGATE and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEGATE position performs unexpectedly, Lamar Advertising 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 Lamar Advertising will offset losses from the drop in Lamar Advertising's long position.| TRADEGATE vs. Easy Software AG | TRADEGATE vs. Playtech plc | TRADEGATE vs. Prosiebensat 1 Media | TRADEGATE vs. Allegheny Technologies Incorporated |
| Lamar Advertising vs. SIDETRADE EO 1 | Lamar Advertising vs. MARKET VECTR RETAIL | Lamar Advertising vs. The Trade Desk | Lamar Advertising vs. Harmony Gold Mining |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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