Correlation Between Brockhaus Capital and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital 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 Brockhaus Capital and Lamar Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and Lamar Advertising, you can compare the effects of market volatilities on Brockhaus Capital 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 Brockhaus Capital with a short position of Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and Lamar Advertising.
Diversification Opportunities for Brockhaus Capital and Lamar Advertising
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brockhaus and Lamar is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising and Brockhaus Capital 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 Brockhaus Capital Management 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 Brockhaus Capital i.e., Brockhaus Capital and Lamar Advertising go up and down completely randomly.
Pair Corralation between Brockhaus Capital and Lamar Advertising
Assuming the 90 days trading horizon Brockhaus Capital Management is expected to under-perform the Lamar Advertising. In addition to that, Brockhaus Capital is 1.84 times more volatile than Lamar Advertising. It trades about -0.11 of its total potential returns per unit of risk. Lamar Advertising is currently generating about 0.15 per unit of volatility. If you would invest 10,966 in Lamar Advertising on September 7, 2024 and sell it today you would earn a total of 1,434 from holding Lamar Advertising or generate 13.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Brockhaus Capital Management vs. Lamar Advertising
Performance |
Timeline |
Brockhaus Capital |
Lamar Advertising |
Brockhaus Capital and Lamar Advertising Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brockhaus Capital and Lamar Advertising
The main advantage of trading using opposite Brockhaus Capital and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital 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.Brockhaus Capital vs. WillScot Mobile Mini | Brockhaus Capital vs. Ribbon Communications | Brockhaus Capital vs. NORTHEAST UTILITIES | Brockhaus Capital vs. Darden Restaurants |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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