Correlation Between Lkcm Balanced and Lkcm Small-mid
Can any of the company-specific risk be diversified away by investing in both Lkcm Balanced and Lkcm Small-mid 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 Lkcm Balanced and Lkcm Small-mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lkcm Balanced Fund and Lkcm Small Mid Cap, you can compare the effects of market volatilities on Lkcm Balanced and Lkcm Small-mid 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 Lkcm Balanced with a short position of Lkcm Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Balanced and Lkcm Small-mid.
Diversification Opportunities for Lkcm Balanced and Lkcm Small-mid
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lkcm and Lkcm is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Balanced Fund and Lkcm Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Small Mid and Lkcm Balanced 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 Lkcm Balanced Fund are associated (or correlated) with Lkcm Small-mid. 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 Mid has no effect on the direction of Lkcm Balanced i.e., Lkcm Balanced and Lkcm Small-mid go up and down completely randomly.
Pair Corralation between Lkcm Balanced and Lkcm Small-mid
Assuming the 90 days horizon Lkcm Balanced is expected to generate 3.53 times less return on investment than Lkcm Small-mid. But when comparing it to its historical volatility, Lkcm Balanced Fund is 2.31 times less risky than Lkcm Small-mid. It trades about 0.26 of its potential returns per unit of risk. Lkcm Small Mid Cap is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 1,107 in Lkcm Small Mid Cap on August 30, 2024 and sell it today you would earn a total of 122.00 from holding Lkcm Small Mid Cap or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lkcm Balanced Fund vs. Lkcm Small Mid Cap
Performance |
| Timeline |
| Lkcm Balanced |
| Lkcm Small Mid |
Lkcm Balanced and Lkcm Small-mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm Balanced and Lkcm Small-mid
The main advantage of trading using opposite Lkcm Balanced and Lkcm Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Balanced position performs unexpectedly, Lkcm Small-mid 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-mid will offset losses from the drop in Lkcm Small-mid's long position.| Lkcm Balanced vs. Mairs Power Balanced | Lkcm Balanced vs. Lkcm Equity Fund | Lkcm Balanced vs. Boston Trust Asset | Lkcm Balanced vs. Value Line Asset |
| Lkcm Small-mid vs. Great West Loomis Sayles | Lkcm Small-mid vs. Applied Finance Explorer | Lkcm Small-mid vs. Fpa Queens Road | Lkcm Small-mid vs. Pace Smallmedium Value |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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