Correlation Between Lebenthal Lisanti and Multisector Bond
Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Multisector Bond 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 Lebenthal Lisanti and Multisector Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lebenthal Lisanti Small and Multisector Bond Sma, you can compare the effects of market volatilities on Lebenthal Lisanti and Multisector Bond 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 Lebenthal Lisanti with a short position of Multisector Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Multisector Bond.
Diversification Opportunities for Lebenthal Lisanti and Multisector Bond
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lebenthal and Multisector is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Multisector Bond Sma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multisector Bond Sma and Lebenthal Lisanti 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 Lebenthal Lisanti Small are associated (or correlated) with Multisector Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multisector Bond Sma has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Multisector Bond go up and down completely randomly.
Pair Corralation between Lebenthal Lisanti and Multisector Bond
Assuming the 90 days horizon Lebenthal Lisanti Small is expected to generate 2.78 times more return on investment than Multisector Bond. However, Lebenthal Lisanti is 2.78 times more volatile than Multisector Bond Sma. It trades about 0.05 of its potential returns per unit of risk. Multisector Bond Sma is currently generating about 0.09 per unit of risk. If you would invest 1,664 in Lebenthal Lisanti Small on August 27, 2024 and sell it today you would earn a total of 565.00 from holding Lebenthal Lisanti Small or generate 33.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lebenthal Lisanti Small vs. Multisector Bond Sma
Performance |
| Timeline |
| Lebenthal Lisanti Small |
| Multisector Bond Sma |
Lebenthal Lisanti and Multisector Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lebenthal Lisanti and Multisector Bond
The main advantage of trading using opposite Lebenthal Lisanti and Multisector Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti position performs unexpectedly, Multisector Bond 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 Multisector Bond will offset losses from the drop in Multisector Bond's long position.| Lebenthal Lisanti vs. Lord Abbett Growth | Lebenthal Lisanti vs. Queens Road Small | Lebenthal Lisanti vs. Eaton Vance Large Cap |
| Multisector Bond vs. Nuveen Minnesota Municipal | Multisector Bond vs. Morningstar Defensive Bond | Multisector Bond vs. Intermediate Term Bond Fund | Multisector Bond vs. Ishares Municipal Bond |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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