Correlation Between Lkcm Small and Invesco Asia
Can any of the company-specific risk be diversified away by investing in both Lkcm Small and Invesco Asia 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 Invesco Asia 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 Invesco Asia Pacific, you can compare the effects of market volatilities on Lkcm Small and Invesco Asia 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 Invesco Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Small and Invesco Asia.
Diversification Opportunities for Lkcm Small and Invesco Asia
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lkcm and Invesco is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Small Cap and Invesco Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Asia Pacific 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 Invesco Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Asia Pacific has no effect on the direction of Lkcm Small i.e., Lkcm Small and Invesco Asia go up and down completely randomly.
Pair Corralation between Lkcm Small and Invesco Asia
Assuming the 90 days horizon Lkcm Small Cap is expected to generate 1.02 times more return on investment than Invesco Asia. However, Lkcm Small is 1.02 times more volatile than Invesco Asia Pacific. It trades about 0.12 of its potential returns per unit of risk. Invesco Asia Pacific is currently generating about -0.05 per unit of risk. If you would invest 2,095 in Lkcm Small Cap on November 3, 2024 and sell it today you would earn a total of 48.00 from holding Lkcm Small Cap or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lkcm Small Cap vs. Invesco Asia Pacific
Performance |
| Timeline |
| Lkcm Small Cap |
| Invesco Asia Pacific |
Lkcm Small and Invesco Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm Small and Invesco Asia
The main advantage of trading using opposite Lkcm Small and Invesco Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Small position performs unexpectedly, Invesco Asia 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 Invesco Asia will offset losses from the drop in Invesco Asia's long position.| Lkcm Small vs. Fulcrum Diversified Absolute | Lkcm Small vs. Jhancock Diversified Macro | Lkcm Small vs. Stone Ridge Diversified | Lkcm Small vs. Wilmington Diversified Income |
| Invesco Asia vs. Lord Abbett Government | Invesco Asia vs. Payden Government Fund | Invesco Asia vs. Inverse Government Long | Invesco Asia vs. Aig Government Money |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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