Correlation Between Small Cap and Lkcm Equity
Can any of the company-specific risk be diversified away by investing in both Small Cap and Lkcm Equity 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 Small Cap and Lkcm Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Equity and Lkcm Equity Fund, you can compare the effects of market volatilities on Small Cap and Lkcm Equity 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 Small Cap with a short position of Lkcm Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Lkcm Equity.
Diversification Opportunities for Small Cap and Lkcm Equity
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Small and Lkcm is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Equity and Lkcm Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Equity Fund and Small Cap 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 Small Cap Equity are associated (or correlated) with Lkcm Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Equity Fund has no effect on the direction of Small Cap i.e., Small Cap and Lkcm Equity go up and down completely randomly.
Pair Corralation between Small Cap and Lkcm Equity
Assuming the 90 days horizon Small Cap Equity is expected to generate 1.84 times more return on investment than Lkcm Equity. However, Small Cap is 1.84 times more volatile than Lkcm Equity Fund. It trades about 0.29 of its potential returns per unit of risk. Lkcm Equity Fund is currently generating about 0.33 per unit of risk. If you would invest 1,852 in Small Cap Equity on September 4, 2024 and sell it today you would earn a total of 187.00 from holding Small Cap Equity or generate 10.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Small Cap Equity vs. Lkcm Equity Fund
Performance |
| Timeline |
| Small Cap Equity |
| Lkcm Equity Fund |
Small Cap and Lkcm Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Lkcm Equity
The main advantage of trading using opposite Small Cap and Lkcm Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Lkcm Equity 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 Equity will offset losses from the drop in Lkcm Equity's long position.| Small Cap vs. Firsthand Alternative Energy | Small Cap vs. Salient Mlp Energy | Small Cap vs. Tortoise Energy Independence | Small Cap vs. Goehring Rozencwajg Resources |
| Lkcm Equity vs. Lkcm Balanced Fund | Lkcm Equity vs. Lkcm Fixed Income | Lkcm Equity vs. Lkcm Small Mid Cap | Lkcm Equity vs. Nationwide Investor Destinations |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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