Correlation Between Lincoln Educational and IAGLN

Can any of the company-specific risk be diversified away by investing in both Lincoln Educational and IAGLN 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 IAGLN 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 IAGLN 425 15 NOV 32, you can compare the effects of market volatilities on Lincoln Educational and IAGLN 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 IAGLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Educational and IAGLN.

Diversification Opportunities for Lincoln Educational and IAGLN

0.51

Correlation Coefficient

Lincoln Educational  IAGLN

Very weak diversification

The 3 months correlation between Lincoln and IAGLN is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and IAGLN 425 15 NOV 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAGLN 425 15 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 IAGLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAGLN 425 15 has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and IAGLN go up and down completely randomly.

Pair Corralation between Lincoln Educational and IAGLN

Given the investment horizon of 90 days Lincoln Educational Services is expected to generate 2.89 times more return on investment than IAGLN. However, Lincoln Educational is 2.89 times more volatile than IAGLN 425 15 NOV 32. It trades about 0.05 of its potential returns per unit of risk. IAGLN 425 15 NOV 32 is currently generating about -0.47 per unit of risk. If you would invest  1,580  in Lincoln Educational Services on October 27, 2024 and sell it today you would earn a total of  23.00  from holding Lincoln Educational Services or generate 1.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	42.11%
Values	Daily Returns

Lincoln Educational Services  vs.  IAGLN 425 15 NOV 32

Lincoln Educational

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lincoln Educational Services are ranked lower than 11 (%) 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.

IAGLN 425 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IAGLN 425 15 NOV 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for IAGLN 425 15 NOV 32 investors.

Pair Trading with Lincoln Educational and IAGLN

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

The idea behind Lincoln Educational Services and IAGLN 425 15 NOV 32 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.