Correlation Between MUTUIONLINE and Lamar Advertising

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

By analyzing existing cross correlation between MUTUIONLINE and Lamar Advertising, you can compare the effects of market volatilities on MUTUIONLINE 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 MUTUIONLINE with a short position of Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of MUTUIONLINE and Lamar Advertising.

Diversification Opportunities for MUTUIONLINE and Lamar Advertising

0.54

Correlation Coefficient

MUTUIONLINE  Lamar Advertising

Very weak diversification

The 3 months correlation between MUTUIONLINE and Lamar is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding MUTUIONLINE and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising and MUTUIONLINE 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 MUTUIONLINE 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 MUTUIONLINE i.e., MUTUIONLINE and Lamar Advertising go up and down completely randomly.

Pair Corralation between MUTUIONLINE and Lamar Advertising

Assuming the 90 days trading horizon MUTUIONLINE is expected to generate 1.03 times less return on investment than Lamar Advertising. In addition to that, MUTUIONLINE is 1.63 times more volatile than Lamar Advertising. It trades about 0.08 of its total potential returns per unit of risk. Lamar Advertising is currently generating about 0.14 per unit of volatility. If you would invest  10,966  in Lamar Advertising on September 9, 2024 and sell it today you would earn a total of  1,334  from holding Lamar Advertising or generate 12.16% return on investment over 90 days.

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

MUTUIONLINE  vs.  Lamar Advertising

MUTUIONLINE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MUTUIONLINE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain essential indicators, MUTUIONLINE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lamar Advertising

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lamar Advertising are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Lamar Advertising may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with MUTUIONLINE and Lamar Advertising

The main advantage of trading using opposite MUTUIONLINE and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MUTUIONLINE 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.

The idea behind MUTUIONLINE and Lamar Advertising 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.