Correlation Between Lkcm Small-mid and Lkcm Small
Can any of the company-specific risk be diversified away by investing in both Lkcm Small-mid and Lkcm Small 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 Small 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 Small Cap, you can compare the effects of market volatilities on Lkcm Small-mid and Lkcm Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Small-mid and Lkcm Small.
Diversification Opportunities for Lkcm Small-mid and Lkcm Small
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lkcm and Lkcm is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Small Mid Cap and Lkcm Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Small Cap 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 Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Small Cap has no effect on the direction of Lkcm Small-mid i.e., Lkcm Small-mid and Lkcm Small go up and down completely randomly.
Pair Corralation between Lkcm Small-mid and Lkcm Small
Assuming the 90 days horizon Lkcm Small Mid Cap is expected to generate 0.93 times more return on investment than Lkcm Small. However, Lkcm Small Mid Cap is 1.08 times less risky than Lkcm Small. It trades about 0.15 of its potential returns per unit of risk. Lkcm Small Cap is currently generating about 0.11 per unit of risk. If you would invest 1,007 in Lkcm Small Mid Cap on August 26, 2024 and sell it today you would earn a total of 222.00 from holding Lkcm Small Mid Cap or generate 22.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lkcm Small Mid Cap vs. Lkcm Small Cap
Performance |
| Timeline |
| Lkcm Small Mid |
| Lkcm Small Cap |
Lkcm Small-mid and Lkcm Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm Small-mid and Lkcm Small
The main advantage of trading using opposite Lkcm Small-mid and Lkcm Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Small-mid position performs unexpectedly, Lkcm Small 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 Small will offset losses from the drop in Lkcm Small's long position.| Lkcm Small-mid vs. Lkcm Aquinas Catholic | Lkcm Small-mid vs. Lkcm Equity Fund | Lkcm Small-mid vs. Lkcm Fixed Income | Lkcm Small-mid vs. Lkcm International Equity |
| Lkcm Small vs. Lkcm Aquinas Catholic | Lkcm Small vs. Lkcm Balanced Fund | Lkcm Small vs. Lkcm Equity Fund | Lkcm Small vs. Lkcm Small Mid Cap |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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