Correlation Between Df Dent and Lebenthal Lisanti
Can any of the company-specific risk be diversified away by investing in both Df Dent 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 Df Dent and Lebenthal Lisanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Df Dent Small and Lebenthal Lisanti Small, you can compare the effects of market volatilities on Df Dent 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 Df Dent with a short position of Lebenthal Lisanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Df Dent and Lebenthal Lisanti.
Diversification Opportunities for Df Dent and Lebenthal Lisanti
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DFDSX and Lebenthal is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Df Dent Small 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 Df Dent 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 Df Dent Small 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 Df Dent i.e., Df Dent and Lebenthal Lisanti go up and down completely randomly.
Pair Corralation between Df Dent and Lebenthal Lisanti
Assuming the 90 days horizon Df Dent Small is expected to generate 0.59 times more return on investment than Lebenthal Lisanti. However, Df Dent Small is 1.68 times less risky than Lebenthal Lisanti. It trades about 0.11 of its potential returns per unit of risk. Lebenthal Lisanti Small is currently generating about -0.04 per unit of risk. If you would invest 2,471 in Df Dent Small on November 4, 2024 and sell it today you would earn a total of 47.00 from holding Df Dent Small or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Df Dent Small vs. Lebenthal Lisanti Small
Performance |
| Timeline |
| Df Dent Small |
| Lebenthal Lisanti Small |
Df Dent and Lebenthal Lisanti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Df Dent and Lebenthal Lisanti
The main advantage of trading using opposite Df Dent and Lebenthal Lisanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Df Dent 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.| Df Dent vs. Commonwealth Global Fund | Df Dent vs. Gmo Global Equity | Df Dent vs. Dreyfusstandish Global Fixed | Df Dent vs. Qs Global Equity |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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