Correlation Between Lkcm International and Lkcm Small-mid
Can any of the company-specific risk be diversified away by investing in both Lkcm International 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 International 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 International Equity and Lkcm Small Mid Cap, you can compare the effects of market volatilities on Lkcm International 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 International with a short position of Lkcm Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm International and Lkcm Small-mid.
Diversification Opportunities for Lkcm International and Lkcm Small-mid
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lkcm and Lkcm is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm International Equity 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 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 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 International i.e., Lkcm International and Lkcm Small-mid go up and down completely randomly.
Pair Corralation between Lkcm International and Lkcm Small-mid
Assuming the 90 days horizon Lkcm International is expected to generate 1.97 times less return on investment than Lkcm Small-mid. But when comparing it to its historical volatility, Lkcm International Equity is 1.22 times less risky than Lkcm Small-mid. It trades about 0.04 of its potential returns per unit of risk. Lkcm Small Mid Cap is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 887.00 in Lkcm Small Mid Cap on November 2, 2024 and sell it today you would earn a total of 317.00 from holding Lkcm Small Mid Cap or generate 35.74% 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 Small Mid Cap
Performance |
| Timeline |
| Lkcm International Equity |
| Lkcm Small Mid |
Lkcm International and Lkcm Small-mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm International and Lkcm Small-mid
The main advantage of trading using opposite Lkcm International and Lkcm Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm International 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 International vs. Fvkvwx | Lkcm International vs. Rbb Fund | Lkcm International vs. Arrow Managed Futures | Lkcm International vs. Ftufox |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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