Correlation Between Lincoln Educational and Trinity Merger

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

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

Diversification Opportunities for Lincoln Educational and Trinity Merger

0.0

Correlation Coefficient

Lincoln Educational  Trinity Merger

Pay attention - limited upside

The 3 months correlation between Lincoln and Trinity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lincoln Educational Services and Trinity Merger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Merger Corp and Lincoln 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 Lincoln Educational Services are associated (or correlated) with Trinity Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Merger Corp has no effect on the direction of Lincoln Educational i.e., Lincoln Educational and Trinity Merger go up and down completely randomly.

Pair Corralation between Lincoln Educational and Trinity Merger

If you would invest  996.00  in Lincoln Educational Services on February 4, 2024 and sell it today you would earn a total of  113.00  from holding Lincoln Educational Services or generate 11.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Lincoln Educational Services  vs.  Trinity Merger Corp

Lincoln Educational

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lincoln Educational Services are ranked lower than 9 (%) 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.

Trinity Merger Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trinity Merger Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Trinity Merger is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lincoln Educational and Trinity Merger

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

The idea behind Lincoln Educational Services and Trinity Merger Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.