Correlation Between Lebenthal Lisanti and Pace Smallmedium
Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Pace Smallmedium 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 Pace Smallmedium 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 Pace Smallmedium Value, you can compare the effects of market volatilities on Lebenthal Lisanti and Pace Smallmedium 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 Pace Smallmedium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Pace Smallmedium.
Diversification Opportunities for Lebenthal Lisanti and Pace Smallmedium
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lebenthal and Pace is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Pace Smallmedium Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Smallmedium Value 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 Pace Smallmedium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Smallmedium Value has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Pace Smallmedium go up and down completely randomly.
Pair Corralation between Lebenthal Lisanti and Pace Smallmedium
Assuming the 90 days horizon Lebenthal Lisanti Small is expected to generate 1.31 times more return on investment than Pace Smallmedium. However, Lebenthal Lisanti is 1.31 times more volatile than Pace Smallmedium Value. It trades about 0.15 of its potential returns per unit of risk. Pace Smallmedium Value is currently generating about 0.17 per unit of risk. If you would invest 2,044 in Lebenthal Lisanti Small on August 24, 2024 and sell it today you would earn a total of 106.00 from holding Lebenthal Lisanti Small or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lebenthal Lisanti Small vs. Pace Smallmedium Value
Performance |
| Timeline |
| Lebenthal Lisanti Small |
| Pace Smallmedium Value |
Lebenthal Lisanti and Pace Smallmedium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lebenthal Lisanti and Pace Smallmedium
The main advantage of trading using opposite Lebenthal Lisanti and Pace Smallmedium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti position performs unexpectedly, Pace Smallmedium 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 Pace Smallmedium will offset losses from the drop in Pace Smallmedium's long position.| Lebenthal Lisanti vs. Lord Abbett Growth | Lebenthal Lisanti vs. Queens Road Small | Lebenthal Lisanti vs. Eaton Vance Large Cap |
| Pace Smallmedium vs. Quantitative Longshort Equity | Pace Smallmedium vs. Ultra Short Term Fixed | Pace Smallmedium vs. Vanguard Institutional Short Term | Pace Smallmedium vs. Rbc Short Duration |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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