Correlation Between Ladenburg Growth and Empiric 2500
Can any of the company-specific risk be diversified away by investing in both Ladenburg Growth and Empiric 2500 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 Ladenburg Growth and Empiric 2500 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ladenburg Growth and Empiric 2500 Fund, you can compare the effects of market volatilities on Ladenburg Growth and Empiric 2500 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 Ladenburg Growth with a short position of Empiric 2500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ladenburg Growth and Empiric 2500.
Diversification Opportunities for Ladenburg Growth and Empiric 2500
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ladenburg and Empiric is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ladenburg Growth and Empiric 2500 Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empiric 2500 and Ladenburg Growth 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 Ladenburg Growth are associated (or correlated) with Empiric 2500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empiric 2500 has no effect on the direction of Ladenburg Growth i.e., Ladenburg Growth and Empiric 2500 go up and down completely randomly.
Pair Corralation between Ladenburg Growth and Empiric 2500
Assuming the 90 days horizon Ladenburg Growth is expected to generate 1.25 times less return on investment than Empiric 2500. But when comparing it to its historical volatility, Ladenburg Growth is 1.62 times less risky than Empiric 2500. It trades about 0.21 of its potential returns per unit of risk. Empiric 2500 Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5,411 in Empiric 2500 Fund on September 3, 2024 and sell it today you would earn a total of 564.00 from holding Empiric 2500 Fund or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ladenburg Growth vs. Empiric 2500 Fund
Performance |
| Timeline |
| Ladenburg Growth |
| Empiric 2500 |
Ladenburg Growth and Empiric 2500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ladenburg Growth and Empiric 2500
The main advantage of trading using opposite Ladenburg Growth and Empiric 2500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ladenburg Growth position performs unexpectedly, Empiric 2500 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 Empiric 2500 will offset losses from the drop in Empiric 2500's long position.| Ladenburg Growth vs. T Rowe Price | Ladenburg Growth vs. Franklin High Yield | Ladenburg Growth vs. Limited Term Tax | Ladenburg Growth vs. Victory High Income |
| Empiric 2500 vs. Aqr Diversified Arbitrage | Empiric 2500 vs. Fidelity Advisor Diversified | Empiric 2500 vs. Harbor Diversified International | Empiric 2500 vs. Massmutual Premier Diversified |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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