Correlation Between New York and Lee Enterprises

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

By analyzing existing cross correlation between New York Times and Lee Enterprises Incorporated, you can compare the effects of market volatilities on New York and Lee Enterprises 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 New York with a short position of Lee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and Lee Enterprises.

Diversification Opportunities for New York and Lee Enterprises

0.08

Correlation Coefficient

New York  Lee Enterprises

Significant diversification

The 3 months correlation between New and Lee is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding New York Times and Lee Enterprises Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lee Enterprises and New York 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 New York Times are associated (or correlated) with Lee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lee Enterprises has no effect on the direction of New York i.e., New York and Lee Enterprises go up and down completely randomly.

Pair Corralation between New York and Lee Enterprises

Considering the 90-day investment horizon New York Times is expected to generate 0.43 times more return on investment than Lee Enterprises. However, New York Times is 2.34 times less risky than Lee Enterprises. It trades about 0.5 of its potential returns per unit of risk. Lee Enterprises Incorporated is currently generating about 0.03 per unit of risk. If you would invest  4,625  in New York Times on March 8, 2024 and sell it today you would earn a total of  484.00  from holding New York Times or generate 10.46% return on investment over 90 days.

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

New York Times  vs.  Lee Enterprises Incorporated

New York Times

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in New York Times are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, New York unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lee Enterprises

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lee Enterprises Incorporated are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Lee Enterprises exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with New York and Lee Enterprises

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

The idea behind New York Times and Lee Enterprises Incorporated 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.