Correlation Between Lamar Advertising and CYTOTOOLS Dusseldorf

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

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

Diversification Opportunities for Lamar Advertising and CYTOTOOLS Dusseldorf

0.04

Correlation Coefficient

Lamar Advertising  CYTOTOOLS Dusseldorf

Significant diversification

The 3 months correlation between Lamar and CYTOTOOLS is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lamar Advertising and CYTOTOOLS Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CYTOTOOLS Dusseldorf and Lamar Advertising 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 Lamar Advertising are associated (or correlated) with CYTOTOOLS Dusseldorf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CYTOTOOLS Dusseldorf has no effect on the direction of Lamar Advertising i.e., Lamar Advertising and CYTOTOOLS Dusseldorf go up and down completely randomly.

Pair Corralation between Lamar Advertising and CYTOTOOLS Dusseldorf

Assuming the 90 days trading horizon Lamar Advertising is expected to generate 0.18 times more return on investment than CYTOTOOLS Dusseldorf. However, Lamar Advertising is 5.69 times less risky than CYTOTOOLS Dusseldorf. It trades about -0.09 of its potential returns per unit of risk. CYTOTOOLS Dusseldorf is currently generating about -0.03 per unit of risk. If you would invest  10,868  in Lamar Advertising on March 21, 2024 and sell it today you would lose (268.00) from holding Lamar Advertising or give up 2.47% of portfolio value over 90 days.

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

Lamar Advertising  vs.  CYTOTOOLS Dusseldorf

Lamar Advertising

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lamar Advertising are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Lamar Advertising is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

CYTOTOOLS Dusseldorf

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CYTOTOOLS Dusseldorf are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CYTOTOOLS Dusseldorf unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lamar Advertising and CYTOTOOLS Dusseldorf

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

The idea behind Lamar Advertising and CYTOTOOLS Dusseldorf 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.