Correlation Between Lgm Risk and Strategic Allocation:
Can any of the company-specific risk be diversified away by investing in both Lgm Risk and Strategic Allocation: 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 Lgm Risk and Strategic Allocation: into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lgm Risk Managed and Strategic Allocation Aggressive, you can compare the effects of market volatilities on Lgm Risk and Strategic Allocation: 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 Lgm Risk with a short position of Strategic Allocation:. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lgm Risk and Strategic Allocation:.
Diversification Opportunities for Lgm Risk and Strategic Allocation:
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lgm and Strategic is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Lgm Risk Managed and Strategic Allocation Aggressiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation: and Lgm Risk 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 Lgm Risk Managed are associated (or correlated) with Strategic Allocation:. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation: has no effect on the direction of Lgm Risk i.e., Lgm Risk and Strategic Allocation: go up and down completely randomly.
Pair Corralation between Lgm Risk and Strategic Allocation:
Assuming the 90 days horizon Lgm Risk is expected to generate 1.46 times less return on investment than Strategic Allocation:. But when comparing it to its historical volatility, Lgm Risk Managed is 1.6 times less risky than Strategic Allocation:. It trades about 0.17 of its potential returns per unit of risk. Strategic Allocation Aggressive is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 674.00 in Strategic Allocation Aggressive on September 1, 2024 and sell it today you would earn a total of 190.00 from holding Strategic Allocation Aggressive or generate 28.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Lgm Risk Managed vs. Strategic Allocation Aggressiv
Performance |
| Timeline |
| Lgm Risk Managed |
| Strategic Allocation: |
Lgm Risk and Strategic Allocation: Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lgm Risk and Strategic Allocation:
The main advantage of trading using opposite Lgm Risk and Strategic Allocation: positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lgm Risk position performs unexpectedly, Strategic Allocation: 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 Strategic Allocation: will offset losses from the drop in Strategic Allocation:'s long position.| Lgm Risk vs. American Balanced Fund | Lgm Risk vs. Westwood Largecap Value | Lgm Risk vs. Brookfield Real Assets | Lgm Risk vs. Fidelity Balanced Fund |
| Strategic Allocation: vs. Mid Cap Value | Strategic Allocation: vs. Equity Growth Fund | Strategic Allocation: vs. Income Growth Fund | Strategic Allocation: vs. Diversified Bond Fund |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |