Correlation Between Lkcm Small and Lkcm Aquinas
Can any of the company-specific risk be diversified away by investing in both Lkcm Small and Lkcm Aquinas 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 Small and Lkcm Aquinas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lkcm Small Cap and Lkcm Aquinas Growth, you can compare the effects of market volatilities on Lkcm Small and Lkcm Aquinas 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 Small with a short position of Lkcm Aquinas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Small and Lkcm Aquinas.
Diversification Opportunities for Lkcm Small and Lkcm Aquinas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lkcm and Lkcm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Small Cap and Lkcm Aquinas Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Aquinas Growth and Lkcm Small 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 Small Cap are associated (or correlated) with Lkcm Aquinas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Aquinas Growth has no effect on the direction of Lkcm Small i.e., Lkcm Small and Lkcm Aquinas go up and down completely randomly.
Pair Corralation between Lkcm Small and Lkcm Aquinas
If you would invest (100.00) in Lkcm Aquinas Growth on November 28, 2024 and sell it today you would earn a total of 100.00 from holding Lkcm Aquinas Growth or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lkcm Small Cap vs. Lkcm Aquinas Growth
Performance |
| Timeline |
| Lkcm Small Cap |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Lkcm Aquinas Growth |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Lkcm Small and Lkcm Aquinas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm Small and Lkcm Aquinas
The main advantage of trading using opposite Lkcm Small and Lkcm Aquinas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Small position performs unexpectedly, Lkcm Aquinas 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 Aquinas will offset losses from the drop in Lkcm Aquinas' long position.The idea behind Lkcm Small Cap and Lkcm Aquinas Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lkcm Aquinas vs. Mndvux | Lkcm Aquinas vs. Prudential Jennison International | Lkcm Aquinas vs. Fidelity New Markets |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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