Correlation Between Lebenthal Lisanti and Smallcap Growth
Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Smallcap Growth 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 Smallcap Growth 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 Smallcap Growth Fund, you can compare the effects of market volatilities on Lebenthal Lisanti and Smallcap Growth 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 Smallcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Smallcap Growth.
Diversification Opportunities for Lebenthal Lisanti and Smallcap Growth
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lebenthal and Smallcap is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Smallcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Growth 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 Smallcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Growth has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Smallcap Growth go up and down completely randomly.
Pair Corralation between Lebenthal Lisanti and Smallcap Growth
Assuming the 90 days horizon Lebenthal Lisanti Small is expected to generate 1.19 times more return on investment than Smallcap Growth. However, Lebenthal Lisanti is 1.19 times more volatile than Smallcap Growth Fund. It trades about 0.26 of its potential returns per unit of risk. Smallcap Growth Fund is currently generating about 0.13 per unit of risk. If you would invest 2,098 in Lebenthal Lisanti Small on September 19, 2024 and sell it today you would earn a total of 138.00 from holding Lebenthal Lisanti Small or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lebenthal Lisanti Small vs. Smallcap Growth Fund
Performance |
| Timeline |
| Lebenthal Lisanti Small |
| Smallcap Growth |
Lebenthal Lisanti and Smallcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lebenthal Lisanti and Smallcap Growth
The main advantage of trading using opposite Lebenthal Lisanti and Smallcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti position performs unexpectedly, Smallcap Growth 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 Smallcap Growth will offset losses from the drop in Smallcap Growth's long position.| Lebenthal Lisanti vs. Lord Abbett Growth | Lebenthal Lisanti vs. Queens Road Small | Lebenthal Lisanti vs. Eaton Vance Large Cap | Lebenthal Lisanti vs. Aquagold International |
| Smallcap Growth vs. Strategic Asset Management | Smallcap Growth vs. Strategic Asset Management | Smallcap Growth vs. Strategic Asset Management | Smallcap Growth vs. Strategic Asset Management |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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