Correlation Between Lkcm Equity and Lkcm Small
Can any of the company-specific risk be diversified away by investing in both Lkcm Equity and Lkcm Small 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 Equity and Lkcm Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lkcm Equity Fund and Lkcm Small Cap, you can compare the effects of market volatilities on Lkcm Equity and Lkcm Small 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 Equity with a short position of Lkcm Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Equity and Lkcm Small.
Diversification Opportunities for Lkcm Equity and Lkcm Small
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lkcm and Lkcm is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Equity Fund and Lkcm Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Small Cap and Lkcm Equity 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 Equity Fund are associated (or correlated) with Lkcm Small. 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 Cap has no effect on the direction of Lkcm Equity i.e., Lkcm Equity and Lkcm Small go up and down completely randomly.
Pair Corralation between Lkcm Equity and Lkcm Small
Assuming the 90 days horizon Lkcm Equity Fund is expected to generate 0.71 times more return on investment than Lkcm Small. However, Lkcm Equity Fund is 1.4 times less risky than Lkcm Small. It trades about 0.05 of its potential returns per unit of risk. Lkcm Small Cap is currently generating about 0.03 per unit of risk. If you would invest 3,195 in Lkcm Equity Fund on November 2, 2024 and sell it today you would earn a total of 610.00 from holding Lkcm Equity Fund or generate 19.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lkcm Equity Fund vs. Lkcm Small Cap
Performance |
| Timeline |
| Lkcm Equity Fund |
| Lkcm Small Cap |
Lkcm Equity and Lkcm Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm Equity and Lkcm Small
The main advantage of trading using opposite Lkcm Equity and Lkcm Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Equity position performs unexpectedly, Lkcm Small 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 will offset losses from the drop in Lkcm Small's long position.| Lkcm Equity vs. Artisan High Income | Lkcm Equity vs. Pace High Yield | Lkcm Equity vs. Rbc Bluebay Global | Lkcm Equity vs. Chartwell Short Duration |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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