Correlation Between Glg Intl and Lkcm Small
Can any of the company-specific risk be diversified away by investing in both Glg Intl and Lkcm Small 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 Glg Intl and Lkcm Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glg Intl Small and Lkcm Small Cap, you can compare the effects of market volatilities on Glg Intl and Lkcm Small 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 Glg Intl with a short position of Lkcm Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glg Intl and Lkcm Small.
Diversification Opportunities for Glg Intl and Lkcm Small
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Glg and Lkcm is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Lkcm Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Small Cap and Glg Intl 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 Glg Intl Small are associated (or correlated) with Lkcm Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Small Cap has no effect on the direction of Glg Intl i.e., Glg Intl and Lkcm Small go up and down completely randomly.
Pair Corralation between Glg Intl and Lkcm Small
Assuming the 90 days horizon Glg Intl Small is expected to generate 0.66 times more return on investment than Lkcm Small. However, Glg Intl Small is 1.51 times less risky than Lkcm Small. It trades about 0.11 of its potential returns per unit of risk. Lkcm Small Cap is currently generating about -0.16 per unit of risk. If you would invest 8,516 in Glg Intl Small on November 3, 2024 and sell it today you would earn a total of 395.00 from holding Glg Intl Small or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glg Intl Small vs. Lkcm Small Cap
Performance |
| Timeline |
| Glg Intl Small |
| Lkcm Small Cap |
Glg Intl and Lkcm Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glg Intl and Lkcm Small
The main advantage of trading using opposite Glg Intl and Lkcm Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glg Intl position performs unexpectedly, Lkcm Small 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 Small will offset losses from the drop in Lkcm Small's long position.| Glg Intl vs. Hunter Small Cap | Glg Intl vs. Ab Small Cap | Glg Intl vs. Df Dent Small | Glg Intl vs. Needham Small Cap |
| Lkcm Small vs. Fulcrum Diversified Absolute | Lkcm Small vs. Jhancock Diversified Macro | Lkcm Small vs. Stone Ridge Diversified | Lkcm Small vs. Wilmington Diversified Income |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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