Correlation Between Peoples Educational and Lincoln Educational

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

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

Diversification Opportunities for Peoples Educational and Lincoln Educational

0.0

Correlation Coefficient

Peoples Educational  Lincoln Educational

Pay attention - limited upside

The 3 months correlation between Peoples and Lincoln is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Educational 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 Peoples 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 Peoples Educational 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 Peoples Educational i.e., Peoples Educational and Lincoln Educational go up and down completely randomly.

Pair Corralation between Peoples Educational and Lincoln Educational

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	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Peoples Educational Holdings  vs.  Lincoln Educational Services

Peoples Educational

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peoples Educational Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Peoples Educational is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

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 Peoples Educational and Lincoln Educational

The main advantage of trading using opposite Peoples Educational and Lincoln Educational positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Educational 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 Peoples Educational 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.