Correlation Between Kinetics Small and Lebenthal Lisanti
Can any of the company-specific risk be diversified away by investing in both Kinetics Small 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 Kinetics Small and Lebenthal Lisanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Small Cap and Lebenthal Lisanti Small, you can compare the effects of market volatilities on Kinetics Small 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 Kinetics Small with a short position of Lebenthal Lisanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Lebenthal Lisanti.
Diversification Opportunities for Kinetics Small and Lebenthal Lisanti
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinetics and LEBENTHAL is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap 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 Kinetics Small 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 Kinetics Small Cap 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 Kinetics Small i.e., Kinetics Small and Lebenthal Lisanti go up and down completely randomly.
Pair Corralation between Kinetics Small and Lebenthal Lisanti
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.57 times more return on investment than Lebenthal Lisanti. However, Kinetics Small is 1.57 times more volatile than Lebenthal Lisanti Small. It trades about 0.11 of its potential returns per unit of risk. Lebenthal Lisanti Small is currently generating about 0.05 per unit of risk. If you would invest 15,759 in Kinetics Small Cap on November 1, 2024 and sell it today you would earn a total of 3,263 from holding Kinetics Small Cap or generate 20.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Lebenthal Lisanti Small
Performance |
| Timeline |
| Kinetics Small Cap |
| Lebenthal Lisanti Small |
Kinetics Small and Lebenthal Lisanti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Lebenthal Lisanti
The main advantage of trading using opposite Kinetics Small and Lebenthal Lisanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small 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.| Kinetics Small vs. Alpine Ultra Short | Kinetics Small vs. Angel Oak Ultrashort | Kinetics Small vs. Touchstone Ultra Short | Kinetics Small vs. Blackrock Global Longshort |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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