Correlation Between Lkcm International and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Lkcm International and Vanguard Total 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 Vanguard Total 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 Vanguard Total International, you can compare the effects of market volatilities on Lkcm International and Vanguard Total 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 Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm International and Vanguard Total.
Diversification Opportunities for Lkcm International and Vanguard Total
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lkcm and Vanguard is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm International Equity and Vanguard Total International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Inter 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 Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Inter has no effect on the direction of Lkcm International i.e., Lkcm International and Vanguard Total go up and down completely randomly.
Pair Corralation between Lkcm International and Vanguard Total
Assuming the 90 days horizon Lkcm International is expected to generate 1.27 times less return on investment than Vanguard Total. In addition to that, Lkcm International is 1.09 times more volatile than Vanguard Total International. It trades about 0.04 of its total potential returns per unit of risk. Vanguard Total International is currently generating about 0.05 per unit of volatility. If you would invest 1,744 in Vanguard Total International on September 12, 2024 and sell it today you would earn a total of 248.00 from holding Vanguard Total International or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lkcm International Equity vs. Vanguard Total International
Performance |
| Timeline |
| Lkcm International Equity |
| Vanguard Total Inter |
Lkcm International and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm International and Vanguard Total
The main advantage of trading using opposite Lkcm International and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm International position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total's long position.| Lkcm International vs. Qs Large Cap | Lkcm International vs. Cb Large Cap | Lkcm International vs. Dunham Large Cap | Lkcm International vs. Touchstone Large Cap |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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