Correlation Between Lebenthal Lisanti and Catalystexceed Defined
Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Catalystexceed Defined 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 Catalystexceed Defined 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 Catalystexceed Defined Shield, you can compare the effects of market volatilities on Lebenthal Lisanti and Catalystexceed Defined 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 Catalystexceed Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Catalystexceed Defined.
Diversification Opportunities for Lebenthal Lisanti and Catalystexceed Defined
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lebenthal and Catalystexceed is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Catalystexceed Defined Shield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystexceed Defined 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 Catalystexceed Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystexceed Defined has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Catalystexceed Defined go up and down completely randomly.
Pair Corralation between Lebenthal Lisanti and Catalystexceed Defined
Assuming the 90 days horizon Lebenthal Lisanti Small is expected to generate 3.05 times more return on investment than Catalystexceed Defined. However, Lebenthal Lisanti is 3.05 times more volatile than Catalystexceed Defined Shield. It trades about 0.06 of its potential returns per unit of risk. Catalystexceed Defined Shield is currently generating about 0.11 per unit of risk. If you would invest 1,578 in Lebenthal Lisanti Small on September 14, 2024 and sell it today you would earn a total of 661.00 from holding Lebenthal Lisanti Small or generate 41.89% 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. Catalystexceed Defined Shield
Performance |
| Timeline |
| Lebenthal Lisanti Small |
| Catalystexceed Defined |
Lebenthal Lisanti and Catalystexceed Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lebenthal Lisanti and Catalystexceed Defined
The main advantage of trading using opposite Lebenthal Lisanti and Catalystexceed Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti position performs unexpectedly, Catalystexceed Defined 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 Catalystexceed Defined will offset losses from the drop in Catalystexceed Defined'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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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