Correlation Between Lkcm Small and Delaware Select
Can any of the company-specific risk be diversified away by investing in both Lkcm Small and Delaware Select 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 Delaware Select 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 Delaware Select Growth, you can compare the effects of market volatilities on Lkcm Small and Delaware Select 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 Delaware Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Small and Delaware Select.
Diversification Opportunities for Lkcm Small and Delaware Select
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lkcm and Delaware is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Small Cap and Delaware Select Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Select 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 Delaware Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Select Growth has no effect on the direction of Lkcm Small i.e., Lkcm Small and Delaware Select go up and down completely randomly.
Pair Corralation between Lkcm Small and Delaware Select
Assuming the 90 days horizon Lkcm Small is expected to generate 1.04 times less return on investment than Delaware Select. In addition to that, Lkcm Small is 1.6 times more volatile than Delaware Select Growth. It trades about 0.04 of its total potential returns per unit of risk. Delaware Select Growth is currently generating about 0.06 per unit of volatility. If you would invest 2,604 in Delaware Select Growth on November 3, 2024 and sell it today you would earn a total of 135.00 from holding Delaware Select Growth or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 46.96% |
| Values | Daily Returns |
Lkcm Small Cap vs. Delaware Select Growth
Performance |
| Timeline |
| Lkcm Small Cap |
| Delaware Select Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lkcm Small and Delaware Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm Small and Delaware Select
The main advantage of trading using opposite Lkcm Small and Delaware Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Small position performs unexpectedly, Delaware Select 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 Delaware Select will offset losses from the drop in Delaware Select's long position.The idea behind Lkcm Small Cap and Delaware Select 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.| Delaware Select vs. Blackrock Health Sciences | Delaware Select vs. Eventide Healthcare Life | Delaware Select vs. Alphacentric Lifesci Healthcare | Delaware Select vs. Invesco Global Health |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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