Correlation Between Bill and Lincoln Educational

Can any of the company-specific risk be diversified away by investing in both Bill 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 Bill and Lincoln Educational into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bill Com Holdings and Lincoln Educational Services, you can compare the effects of market volatilities on Bill 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 Bill with a short position of Lincoln Educational. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bill and Lincoln Educational.

Diversification Opportunities for Bill and Lincoln Educational

-0.23

Correlation Coefficient

Bill  Lincoln Educational

Very good diversification

The 3 months correlation between Bill and Lincoln is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and Lincoln Educational Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Educational and Bill 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 Bill Com Holdings 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 Bill i.e., Bill and Lincoln Educational go up and down completely randomly.

Pair Corralation between Bill and Lincoln Educational

Given the investment horizon of 90 days Bill Com Holdings is expected to under-perform the Lincoln Educational. In addition to that, Bill is 1.55 times more volatile than Lincoln Educational Services. It trades about -0.14 of its total potential returns per unit of risk. Lincoln Educational Services is currently generating about 0.01 per unit of volatility. If you would invest  1,580  in Lincoln Educational Services on December 25, 2024 and sell it today you would lose (10.00) from holding Lincoln Educational Services or give up 0.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bill Com Holdings  vs.  Lincoln Educational Services

Bill Com Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bill Com Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Lincoln Educational

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lincoln Educational Services are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Lincoln Educational is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bill and Lincoln Educational

The main advantage of trading using opposite Bill and Lincoln Educational positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bill 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.

The idea behind Bill Com Holdings and Lincoln Educational Services 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.