Correlation Between Gmo Alternative and Lkcm Balanced
Can any of the company-specific risk be diversified away by investing in both Gmo Alternative and Lkcm Balanced 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 Gmo Alternative and Lkcm Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Alternative Allocation and Lkcm Balanced Fund, you can compare the effects of market volatilities on Gmo Alternative and Lkcm Balanced 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 Gmo Alternative with a short position of Lkcm Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Alternative and Lkcm Balanced.
Diversification Opportunities for Gmo Alternative and Lkcm Balanced
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gmo and Lkcm is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Alternative Allocation and Lkcm Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Balanced and Gmo 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 Gmo Alternative Allocation are associated (or correlated) with Lkcm Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Balanced has no effect on the direction of Gmo Alternative i.e., Gmo Alternative and Lkcm Balanced go up and down completely randomly.
Pair Corralation between Gmo Alternative and Lkcm Balanced
Assuming the 90 days horizon Gmo Alternative Allocation is expected to under-perform the Lkcm Balanced. But the mutual fund apears to be less risky and, when comparing its historical volatility, Gmo Alternative Allocation is 1.27 times less risky than Lkcm Balanced. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Lkcm Balanced Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,701 in Lkcm Balanced Fund on September 1, 2024 and sell it today you would earn a total of 268.00 from holding Lkcm Balanced Fund or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Alternative Allocation vs. Lkcm Balanced Fund
Performance |
| Timeline |
| Gmo Alternative Allo |
| Lkcm Balanced |
Gmo Alternative and Lkcm Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Alternative and Lkcm Balanced
The main advantage of trading using opposite Gmo Alternative and Lkcm Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Alternative position performs unexpectedly, Lkcm Balanced 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 Balanced will offset losses from the drop in Lkcm Balanced's long position.| Gmo Alternative vs. Artisan Select Equity | Gmo Alternative vs. Locorr Dynamic Equity | Gmo Alternative vs. The Gabelli Equity | Gmo Alternative vs. Small Cap Equity |
| Lkcm Balanced vs. Mairs Power Balanced | Lkcm Balanced vs. Lkcm Equity Fund | Lkcm Balanced vs. Boston Trust Asset | Lkcm Balanced vs. Value Line Asset |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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