Correlation Between Core Alternative and LHA Market
Can any of the company-specific risk be diversified away by investing in both Core Alternative and LHA Market 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 Core Alternative and LHA Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Alternative ETF and LHA Market State, you can compare the effects of market volatilities on Core Alternative and LHA Market 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 Core Alternative with a short position of LHA Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Alternative and LHA Market.
Diversification Opportunities for Core Alternative and LHA Market
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Core and LHA is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Core Alternative ETF and LHA Market State in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LHA Market State and Core Alternative 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 Core Alternative ETF are associated (or correlated) with LHA Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LHA Market State has no effect on the direction of Core Alternative i.e., Core Alternative and LHA Market go up and down completely randomly.
Pair Corralation between Core Alternative and LHA Market
Given the investment horizon of 90 days Core Alternative ETF is expected to under-perform the LHA Market. But the etf apears to be less risky and, when comparing its historical volatility, Core Alternative ETF is 1.26 times less risky than LHA Market. The etf trades about -0.23 of its potential returns per unit of risk. The LHA Market State is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,195 in LHA Market State on September 12, 2024 and sell it today you would earn a total of 46.00 from holding LHA Market State or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Alternative ETF vs. LHA Market State
Performance |
| Timeline |
| Core Alternative ETF |
| LHA Market State |
Core Alternative and LHA Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Alternative and LHA Market
The main advantage of trading using opposite Core Alternative and LHA Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Alternative position performs unexpectedly, LHA Market 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 LHA Market will offset losses from the drop in LHA Market's long position.| Core Alternative vs. AGFiQ Market Neutral | Core Alternative vs. Cambria Global Momentum | Core Alternative vs. Cambria Global Asset | Core Alternative vs. Cambria Emerging Shareholder |
| LHA Market vs. Alpha Architect Quantitative | LHA Market vs. Alpha Architect International | LHA Market vs. Alpha Architect International | LHA Market vs. Alpha Architect Quantitative |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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