Correlation Between Ab Select and Lkcm Aquinas
Can any of the company-specific risk be diversified away by investing in both Ab Select and Lkcm Aquinas 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 Ab Select and Lkcm Aquinas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Longshort and Lkcm Aquinas Catholic, you can compare the effects of market volatilities on Ab Select and Lkcm Aquinas 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 Ab Select with a short position of Lkcm Aquinas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Lkcm Aquinas.
Diversification Opportunities for Ab Select and Lkcm Aquinas
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between ASCLX and Lkcm is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Longshort and Lkcm Aquinas Catholic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Aquinas Catholic and Ab Select 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 Ab Select Longshort are associated (or correlated) with Lkcm Aquinas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Aquinas Catholic has no effect on the direction of Ab Select i.e., Ab Select and Lkcm Aquinas go up and down completely randomly.
Pair Corralation between Ab Select and Lkcm Aquinas
Assuming the 90 days horizon Ab Select Longshort is expected to generate 0.53 times more return on investment than Lkcm Aquinas. However, Ab Select Longshort is 1.87 times less risky than Lkcm Aquinas. It trades about 0.12 of its potential returns per unit of risk. Lkcm Aquinas Catholic is currently generating about 0.05 per unit of risk. If you would invest 1,088 in Ab Select Longshort on September 3, 2024 and sell it today you would earn a total of 320.00 from holding Ab Select Longshort or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Longshort vs. Lkcm Aquinas Catholic
Performance |
| Timeline |
| Ab Select Longshort |
| Lkcm Aquinas Catholic |
Ab Select and Lkcm Aquinas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Lkcm Aquinas
The main advantage of trading using opposite Ab Select and Lkcm Aquinas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Lkcm Aquinas 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 Lkcm Aquinas will offset losses from the drop in Lkcm Aquinas' long position.| Ab Select vs. Vanguard Financials Index | Ab Select vs. Davis Financial Fund | Ab Select vs. Icon Financial Fund | Ab Select vs. Blackrock Financial Institutions |
| Lkcm Aquinas vs. American Funds The | Lkcm Aquinas vs. American Funds The | Lkcm Aquinas vs. Growth Fund Of | Lkcm Aquinas vs. Growth Fund Of |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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