Correlation Between Auer Growth and Lebenthal Lisanti
Can any of the company-specific risk be diversified away by investing in both Auer Growth and Lebenthal Lisanti 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 Auer Growth and Lebenthal Lisanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auer Growth Fund and Lebenthal Lisanti Small, you can compare the effects of market volatilities on Auer Growth and Lebenthal Lisanti 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 Auer Growth with a short position of Lebenthal Lisanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Lebenthal Lisanti.
Diversification Opportunities for Auer Growth and Lebenthal Lisanti
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auer and Lebenthal is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Lebenthal Lisanti Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lebenthal Lisanti Small and Auer Growth 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 Auer Growth Fund are associated (or correlated) with Lebenthal Lisanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lebenthal Lisanti Small has no effect on the direction of Auer Growth i.e., Auer Growth and Lebenthal Lisanti go up and down completely randomly.
Pair Corralation between Auer Growth and Lebenthal Lisanti
Assuming the 90 days horizon Auer Growth is expected to generate 1.17 times less return on investment than Lebenthal Lisanti. But when comparing it to its historical volatility, Auer Growth Fund is 1.13 times less risky than Lebenthal Lisanti. It trades about 0.05 of its potential returns per unit of risk. Lebenthal Lisanti Small is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,663 in Lebenthal Lisanti Small on August 28, 2024 and sell it today you would earn a total of 591.00 from holding Lebenthal Lisanti Small or generate 35.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. Lebenthal Lisanti Small
Performance |
| Timeline |
| Auer Growth Fund |
| Lebenthal Lisanti Small |
Auer Growth and Lebenthal Lisanti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Lebenthal Lisanti
The main advantage of trading using opposite Auer Growth and Lebenthal Lisanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, Lebenthal Lisanti 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 Lebenthal Lisanti will offset losses from the drop in Lebenthal Lisanti's long position.| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
| Lebenthal Lisanti vs. Lord Abbett Growth | Lebenthal Lisanti vs. Queens Road Small | Lebenthal Lisanti vs. Eaton Vance Large Cap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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