Correlation Between Lebenthal Lisanti and Rbc Small
Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Rbc Small 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 Rbc Small 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 Rbc Small Cap, you can compare the effects of market volatilities on Lebenthal Lisanti and Rbc Small 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 Rbc Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Rbc Small.
Diversification Opportunities for Lebenthal Lisanti and Rbc Small
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LEBENTHAL and Rbc is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Rbc Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Small Cap 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 Rbc Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Small Cap has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Rbc Small go up and down completely randomly.
Pair Corralation between Lebenthal Lisanti and Rbc Small
Assuming the 90 days horizon Lebenthal Lisanti is expected to generate 1.36 times less return on investment than Rbc Small. In addition to that, Lebenthal Lisanti is 1.26 times more volatile than Rbc Small Cap. It trades about 0.05 of its total potential returns per unit of risk. Rbc Small Cap is currently generating about 0.09 per unit of volatility. If you would invest 1,537 in Rbc Small Cap on November 1, 2024 and sell it today you would earn a total of 95.00 from holding Rbc Small Cap or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lebenthal Lisanti Small vs. Rbc Small Cap
Performance |
| Timeline |
| Lebenthal Lisanti Small |
| Rbc Small Cap |
Lebenthal Lisanti and Rbc Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lebenthal Lisanti and Rbc Small
The main advantage of trading using opposite Lebenthal Lisanti and Rbc Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti position performs unexpectedly, Rbc Small 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 Rbc Small will offset losses from the drop in Rbc Small's long position.| Lebenthal Lisanti vs. Lord Abbett Growth | Lebenthal Lisanti vs. Queens Road Small | Lebenthal Lisanti vs. Eaton Vance Large Cap |
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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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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