Correlation Between Lkcm Small-mid and Lkcm International
Can any of the company-specific risk be diversified away by investing in both Lkcm Small-mid and Lkcm International 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-mid and Lkcm International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lkcm Small Mid Cap and Lkcm International Equity, you can compare the effects of market volatilities on Lkcm Small-mid and Lkcm International 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-mid with a short position of Lkcm International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Small-mid and Lkcm International.
Diversification Opportunities for Lkcm Small-mid and Lkcm International
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lkcm and Lkcm is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Small Mid Cap and Lkcm International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm International Equity and Lkcm Small-mid 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 Mid Cap are associated (or correlated) with Lkcm International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm International Equity has no effect on the direction of Lkcm Small-mid i.e., Lkcm Small-mid and Lkcm International go up and down completely randomly.
Pair Corralation between Lkcm Small-mid and Lkcm International
Assuming the 90 days horizon Lkcm Small Mid Cap is expected to generate 1.32 times more return on investment than Lkcm International. However, Lkcm Small-mid is 1.32 times more volatile than Lkcm International Equity. It trades about 0.07 of its potential returns per unit of risk. Lkcm International Equity is currently generating about 0.05 per unit of risk. If you would invest 874.00 in Lkcm Small Mid Cap on August 30, 2024 and sell it today you would earn a total of 355.00 from holding Lkcm Small Mid Cap or generate 40.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lkcm Small Mid Cap vs. Lkcm International Equity
Performance |
| Timeline |
| Lkcm Small Mid |
| Lkcm International Equity |
Lkcm Small-mid and Lkcm International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm Small-mid and Lkcm International
The main advantage of trading using opposite Lkcm Small-mid and Lkcm International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Small-mid position performs unexpectedly, Lkcm International 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 International will offset losses from the drop in Lkcm International's long position.| Lkcm Small-mid vs. Great West Loomis Sayles | Lkcm Small-mid vs. Applied Finance Explorer | Lkcm Small-mid vs. Fpa Queens Road | Lkcm Small-mid vs. Pace Smallmedium Value |
| Lkcm International vs. Us Government Securities | Lkcm International vs. Us Government Securities | Lkcm International vs. Inverse Government Long | Lkcm International vs. Dreyfus Government Cash |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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