Correlation Between Lkcm Small and Siit High
Can any of the company-specific risk be diversified away by investing in both Lkcm Small and Siit High 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 Siit High 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 Siit High Yield, you can compare the effects of market volatilities on Lkcm Small and Siit High 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 Siit High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Small and Siit High.
Diversification Opportunities for Lkcm Small and Siit High
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lkcm and Siit is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Small Cap and Siit High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit High Yield 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 Siit High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit High Yield has no effect on the direction of Lkcm Small i.e., Lkcm Small and Siit High go up and down completely randomly.
Pair Corralation between Lkcm Small and Siit High
Assuming the 90 days horizon Lkcm Small is expected to generate 1.53 times less return on investment than Siit High. In addition to that, Lkcm Small is 4.37 times more volatile than Siit High Yield. It trades about 0.03 of its total potential returns per unit of risk. Siit High Yield is currently generating about 0.23 per unit of volatility. If you would invest 713.00 in Siit High Yield on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Siit High Yield or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lkcm Small Cap vs. Siit High Yield
Performance |
| Timeline |
| Lkcm Small Cap |
| Siit High Yield |
Lkcm Small and Siit High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm Small and Siit High
The main advantage of trading using opposite Lkcm Small and Siit High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Small position performs unexpectedly, Siit High 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 Siit High will offset losses from the drop in Siit High's long position.| Lkcm Small vs. Gabelli Convertible And | Lkcm Small vs. Fidelity Sai Convertible | Lkcm Small vs. Rationalpier 88 Convertible | Lkcm Small vs. Calamos Dynamic Convertible |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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