Correlation Between Lebenthal Lisanti and Prudential Health
Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Prudential Health 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 Prudential Health 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 Prudential Health Sciences, you can compare the effects of market volatilities on Lebenthal Lisanti and Prudential Health 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 Prudential Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Prudential Health.
Diversification Opportunities for Lebenthal Lisanti and Prudential Health
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lebenthal and Prudential is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Prudential Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Health 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 Prudential Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Health has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Prudential Health go up and down completely randomly.
Pair Corralation between Lebenthal Lisanti and Prudential Health
Assuming the 90 days horizon Lebenthal Lisanti Small is expected to generate 1.2 times more return on investment than Prudential Health. However, Lebenthal Lisanti is 1.2 times more volatile than Prudential Health Sciences. It trades about 0.06 of its potential returns per unit of risk. Prudential Health Sciences is currently generating about -0.05 per unit of risk. If you would invest 2,206 in Lebenthal Lisanti Small on September 13, 2024 and sell it today you would earn a total of 33.00 from holding Lebenthal Lisanti Small or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lebenthal Lisanti Small vs. Prudential Health Sciences
Performance |
| Timeline |
| Lebenthal Lisanti Small |
| Prudential Health |
Lebenthal Lisanti and Prudential Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lebenthal Lisanti and Prudential Health
The main advantage of trading using opposite Lebenthal Lisanti and Prudential Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti position performs unexpectedly, Prudential Health 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 Prudential Health will offset losses from the drop in Prudential Health's long position.| Lebenthal Lisanti vs. Lord Abbett Growth | Lebenthal Lisanti vs. Queens Road Small | Lebenthal Lisanti vs. Eaton Vance Large Cap |
| Prudential Health vs. Hennessy Technology Fund | Prudential Health vs. Biotechnology Ultrasector Profund | Prudential Health vs. Towpath Technology | Prudential Health vs. Global Technology Portfolio |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |