Correlation Between Lincoln Educational and 126408GW7

Can any of the company-specific risk be diversified away by investing in both Lincoln Educational and 126408GW7 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 126408GW7 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 CSX P 475, you can compare the effects of market volatilities on Lincoln Educational and 126408GW7 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 126408GW7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lincoln Educational and 126408GW7.

Diversification Opportunities for Lincoln Educational and 126408GW7

-0.73

Correlation Coefficient

Lincoln Educational  126408GW7

Pay attention - limited upside

The 3 months correlation between Lincoln and 126408GW7 is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and CSX P 475 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX P 475 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 126408GW7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX P 475 has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and 126408GW7 go up and down completely randomly.

Pair Corralation between Lincoln Educational and 126408GW7

Given the investment horizon of 90 days Lincoln Educational is expected to generate 38.35 times less return on investment than 126408GW7. But when comparing it to its historical volatility, Lincoln Educational Services is 37.29 times less risky than 126408GW7. It trades about 0.09 of its potential returns per unit of risk. CSX P 475 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9,745  in CSX P 475 on October 3, 2024 and sell it today you would lose (591.00) from holding CSX P 475 or give up 6.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	63.43%
Values	Daily Returns

Lincoln Educational Services  vs.  CSX P 475

Lincoln Educational

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lincoln Educational Services are ranked lower than 16 (%) 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.

CSX P 475

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSX P 475 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal 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 CSX P 475 investors.

Pair Trading with Lincoln Educational and 126408GW7

The main advantage of trading using opposite Lincoln Educational and 126408GW7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lincoln Educational position performs unexpectedly, 126408GW7 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 126408GW7 will offset losses from the drop in 126408GW7's long position.

The idea behind Lincoln Educational Services and CSX P 475 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.