Correlation Between Lkcm Equity and Value Line
Can any of the company-specific risk be diversified away by investing in both Lkcm Equity and Value Line 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 Value Line 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 Value Line Asset, you can compare the effects of market volatilities on Lkcm Equity and Value Line 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 Value Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Equity and Value Line.
Diversification Opportunities for Lkcm Equity and Value Line
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lkcm and Value is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Equity Fund and Value Line Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line Asset 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 Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line Asset has no effect on the direction of Lkcm Equity i.e., Lkcm Equity and Value Line go up and down completely randomly.
Pair Corralation between Lkcm Equity and Value Line
Assuming the 90 days horizon Lkcm Equity Fund is expected to generate 1.54 times more return on investment than Value Line. However, Lkcm Equity is 1.54 times more volatile than Value Line Asset. It trades about 0.19 of its potential returns per unit of risk. Value Line Asset is currently generating about 0.23 per unit of risk. If you would invest 4,003 in Lkcm Equity Fund on August 30, 2024 and sell it today you would earn a total of 162.00 from holding Lkcm Equity Fund or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lkcm Equity Fund vs. Value Line Asset
Performance |
| Timeline |
| Lkcm Equity Fund |
| Value Line Asset |
Lkcm Equity and Value Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm Equity and Value Line
The main advantage of trading using opposite Lkcm Equity and Value Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Equity position performs unexpectedly, Value Line 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 Value Line will offset losses from the drop in Value Line's long position.| Lkcm Equity vs. Pace High Yield | Lkcm Equity vs. Fidelity Capital Income | Lkcm Equity vs. Prudential High Yield | Lkcm Equity vs. Alpine High Yield |
| Value Line vs. Value Line Income | Value Line vs. Value Line Premier | Value Line vs. Value Line Mid | Value Line vs. Value Line Larger |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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