Correlation Between Lkcm Small and Gabelli Convertible
Can any of the company-specific risk be diversified away by investing in both Lkcm Small and Gabelli Convertible 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 Gabelli Convertible 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 Gabelli Convertible And, you can compare the effects of market volatilities on Lkcm Small and Gabelli Convertible 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 Gabelli Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Small and Gabelli Convertible.
Diversification Opportunities for Lkcm Small and Gabelli Convertible
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lkcm and Gabelli is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Small Cap and Gabelli Convertible And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Convertible And 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 Gabelli Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Convertible And has no effect on the direction of Lkcm Small i.e., Lkcm Small and Gabelli Convertible go up and down completely randomly.
Pair Corralation between Lkcm Small and Gabelli Convertible
Assuming the 90 days horizon Lkcm Small is expected to generate 2.69 times less return on investment than Gabelli Convertible. But when comparing it to its historical volatility, Lkcm Small Cap is 1.25 times less risky than Gabelli Convertible. It trades about 0.09 of its potential returns per unit of risk. Gabelli Convertible And is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 386.00 in Gabelli Convertible And on September 13, 2024 and sell it today you would earn a total of 17.00 from holding Gabelli Convertible And or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lkcm Small Cap vs. Gabelli Convertible And
Performance |
| Timeline |
| Lkcm Small Cap |
| Gabelli Convertible And |
Lkcm Small and Gabelli Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm Small and Gabelli Convertible
The main advantage of trading using opposite Lkcm Small and Gabelli Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Small position performs unexpectedly, Gabelli Convertible 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 Gabelli Convertible will offset losses from the drop in Gabelli Convertible's long position.| Lkcm Small vs. Volumetric Fund Volumetric | Lkcm Small vs. Versatile Bond Portfolio | Lkcm Small vs. T Rowe Price | Lkcm Small vs. Ab Small 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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