Correlation Between Getty Images and Lincoln Educational

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

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

Diversification Opportunities for Getty Images and Lincoln Educational

-0.51

Correlation Coefficient

Getty Images  Lincoln Educational

Excellent diversification

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

Pair Corralation between Getty Images and Lincoln Educational

Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Lincoln Educational. In addition to that, Getty Images is 1.44 times more volatile than Lincoln Educational Services. It trades about -0.08 of its total potential returns per unit of risk. Lincoln Educational Services is currently generating about 0.22 per unit of volatility. If you would invest  1,178  in Lincoln Educational Services on September 3, 2024 and sell it today you would earn a total of  465.00  from holding Lincoln Educational Services or generate 39.47% return on investment over 90 days.

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

Getty Images Holdings  vs.  Lincoln Educational Services

Getty Images Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Images Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Lincoln Educational

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lincoln Educational Services are ranked lower than 17 (%) 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.

Pair Trading with Getty Images and Lincoln Educational

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

The idea behind Getty Images Holdings and Lincoln Educational Services 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.