Correlation Between Tyson Foods and Lincoln Educational
Can any of the company-specific risk be diversified away by investing in both Tyson Foods and Lincoln Educational 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 Tyson Foods and Lincoln Educational into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Lincoln Educational Services, you can compare the effects of market volatilities on Tyson Foods and Lincoln Educational 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 Tyson Foods with a short position of Lincoln Educational. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Lincoln Educational.
Diversification Opportunities for Tyson Foods and Lincoln Educational
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tyson and Lincoln is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Lincoln Educational Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Educational and Tyson Foods 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 Tyson Foods are associated (or correlated) with Lincoln Educational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Educational has no effect on the direction of Tyson Foods i.e., Tyson Foods and Lincoln Educational go up and down completely randomly.
Pair Corralation between Tyson Foods and Lincoln Educational
Considering the 90-day investment horizon Tyson Foods is expected to generate 13.7 times less return on investment than Lincoln Educational. But when comparing it to its historical volatility, Tyson Foods is 1.78 times less risky than Lincoln Educational. It trades about 0.03 of its potential returns per unit of risk. Lincoln Educational Services is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,208 in Lincoln Educational Services on September 12, 2024 and sell it today you would earn a total of 466.00 from holding Lincoln Educational Services or generate 38.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Lincoln Educational Services
Performance |
| Timeline |
| Tyson Foods |
| Lincoln Educational |
Tyson Foods and Lincoln Educational Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Lincoln Educational
The main advantage of trading using opposite Tyson Foods and Lincoln Educational positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods position performs unexpectedly, Lincoln Educational 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 Lincoln Educational will offset losses from the drop in Lincoln Educational's long position.| Tyson Foods vs. Bunge Limited | Tyson Foods vs. Cal Maine Foods | Tyson Foods vs. Dole PLC | Tyson Foods vs. Adecoagro SA |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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