Correlation Between Ispire Technology and Lincoln Educational

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

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

Diversification Opportunities for Ispire Technology and Lincoln Educational

-0.42

Correlation Coefficient

Ispire Technology  Lincoln Educational

Very good diversification

The 3 months correlation between Ispire and Lincoln is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ispire Technology Common and Lincoln Educational Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Educational and Ispire Technology 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 Ispire Technology Common 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 Ispire Technology i.e., Ispire Technology and Lincoln Educational go up and down completely randomly.

Pair Corralation between Ispire Technology and Lincoln Educational

Given the investment horizon of 90 days Ispire Technology is expected to generate 2.95 times less return on investment than Lincoln Educational. In addition to that, Ispire Technology is 2.14 times more volatile than Lincoln Educational Services. It trades about 0.01 of its total potential returns per unit of risk. Lincoln Educational Services is currently generating about 0.09 per unit of volatility. If you would invest  579.00  in Lincoln Educational Services on September 20, 2024 and sell it today you would earn a total of  935.00  from holding Lincoln Educational Services or generate 161.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	87.27%
Values	Daily Returns

Ispire Technology Common  vs.  Lincoln Educational Services

Ispire Technology Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ispire Technology Common has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Lincoln Educational

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lincoln Educational Services are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Lincoln Educational exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ispire Technology and Lincoln Educational

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

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.