Correlation Between Lincoln Educational and Fly E

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

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

Diversification Opportunities for Lincoln Educational and Fly E

-0.39

Correlation Coefficient

Lincoln Educational  Fly E

Very good diversification

The 3 months correlation between Lincoln and Fly is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and Fly E Group, Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fly E Group, and Lincoln Educational 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 Lincoln Educational Services are associated (or correlated) with Fly E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fly E Group, has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and Fly E go up and down completely randomly.

Pair Corralation between Lincoln Educational and Fly E

Given the investment horizon of 90 days Lincoln Educational is expected to generate 10.62 times less return on investment than Fly E. But when comparing it to its historical volatility, Lincoln Educational Services is 2.71 times less risky than Fly E. It trades about 0.02 of its potential returns per unit of risk. Fly E Group, Common is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  41.00  in Fly E Group, Common on December 20, 2024 and sell it today you would earn a total of  9.00  from holding Fly E Group, Common or generate 21.95% return on investment over 90 days.

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

Lincoln Educational Services  vs.  Fly E Group, Common

Lincoln Educational

Risk-Adjusted Performance

Very 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.

Fly E Group,

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fly E Group, Common are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Fly E exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lincoln Educational and Fly E

The main advantage of trading using opposite Lincoln Educational and Fly E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Educational position performs unexpectedly, Fly E 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 Fly E will offset losses from the drop in Fly E's long position.

The idea behind Lincoln Educational Services and Fly E Group, Common 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.