Correlation Between Lkcm International and Lkcm Fixed
Can any of the company-specific risk be diversified away by investing in both Lkcm International and Lkcm Fixed 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 International and Lkcm Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lkcm International Equity and Lkcm Fixed Income, you can compare the effects of market volatilities on Lkcm International and Lkcm Fixed 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 International with a short position of Lkcm Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm International and Lkcm Fixed.
Diversification Opportunities for Lkcm International and Lkcm Fixed
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lkcm and Lkcm is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm International Equity and Lkcm Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Fixed Income and Lkcm International 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 International Equity are associated (or correlated) with Lkcm Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Fixed Income has no effect on the direction of Lkcm International i.e., Lkcm International and Lkcm Fixed go up and down completely randomly.
Pair Corralation between Lkcm International and Lkcm Fixed
Assuming the 90 days horizon Lkcm International Equity is expected to generate 4.18 times more return on investment than Lkcm Fixed. However, Lkcm International is 4.18 times more volatile than Lkcm Fixed Income. It trades about 0.05 of its potential returns per unit of risk. Lkcm Fixed Income is currently generating about 0.08 per unit of risk. If you would invest 1,111 in Lkcm International Equity on August 30, 2024 and sell it today you would earn a total of 255.00 from holding Lkcm International Equity or generate 22.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lkcm International Equity vs. Lkcm Fixed Income
Performance |
| Timeline |
| Lkcm International Equity |
| Lkcm Fixed Income |
Lkcm International and Lkcm Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm International and Lkcm Fixed
The main advantage of trading using opposite Lkcm International and Lkcm Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm International position performs unexpectedly, Lkcm Fixed 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 Fixed will offset losses from the drop in Lkcm Fixed's long position.| Lkcm International vs. Us Government Securities | Lkcm International vs. Us Government Securities | Lkcm International vs. Inverse Government Long | Lkcm International vs. Dreyfus Government Cash |
| Lkcm Fixed vs. Gmo Resources | Lkcm Fixed vs. Goldman Sachs Mlp | Lkcm Fixed vs. Firsthand Alternative Energy | Lkcm Fixed vs. Oil Gas Ultrasector |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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