Correlation Between Lebenthal Lisanti and Transamerica High
Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Transamerica High 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 Transamerica High 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 Transamerica High Yield, you can compare the effects of market volatilities on Lebenthal Lisanti and Transamerica High 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 Transamerica High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Transamerica High.
Diversification Opportunities for Lebenthal Lisanti and Transamerica High
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lebenthal and Transamerica is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Transamerica High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica High Yield 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 Transamerica High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica High Yield has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Transamerica High go up and down completely randomly.
Pair Corralation between Lebenthal Lisanti and Transamerica High
Assuming the 90 days horizon Lebenthal Lisanti Small is expected to generate 4.53 times more return on investment than Transamerica High. However, Lebenthal Lisanti is 4.53 times more volatile than Transamerica High Yield. It trades about 0.08 of its potential returns per unit of risk. Transamerica High Yield is currently generating about 0.13 per unit of risk. If you would invest 1,565 in Lebenthal Lisanti Small on September 12, 2024 and sell it today you would earn a total of 656.00 from holding Lebenthal Lisanti Small or generate 41.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Lebenthal Lisanti Small vs. Transamerica High Yield
Performance |
| Timeline |
| Lebenthal Lisanti Small |
| Transamerica High Yield |
Lebenthal Lisanti and Transamerica High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lebenthal Lisanti and Transamerica High
The main advantage of trading using opposite Lebenthal Lisanti and Transamerica High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti position performs unexpectedly, Transamerica High 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 Transamerica High will offset losses from the drop in Transamerica High's long position.| Lebenthal Lisanti vs. Lord Abbett Growth | Lebenthal Lisanti vs. Queens Road Small | Lebenthal Lisanti vs. Eaton Vance Large Cap |
| Transamerica High vs. Kinetics Small Cap | Transamerica High vs. Sp Smallcap 600 | Transamerica High vs. Mutual Of America | Transamerica High vs. Lebenthal Lisanti Small |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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