Correlation Between Qs Large and Stralem Equity
Can any of the company-specific risk be diversified away by investing in both Qs Large and Stralem Equity 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 Qs Large and Stralem Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qs Large Cap and Stralem Equity Fund, you can compare the effects of market volatilities on Qs Large and Stralem Equity 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 Qs Large with a short position of Stralem Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qs Large and Stralem Equity.
Diversification Opportunities for Qs Large and Stralem Equity
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LMUSX and Stralem is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Qs Large Cap and Stralem Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stralem Equity and Qs Large 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 Qs Large Cap are associated (or correlated) with Stralem Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stralem Equity has no effect on the direction of Qs Large i.e., Qs Large and Stralem Equity go up and down completely randomly.
Pair Corralation between Qs Large and Stralem Equity
Assuming the 90 days horizon Qs Large Cap is expected to generate 0.98 times more return on investment than Stralem Equity. However, Qs Large Cap is 1.02 times less risky than Stralem Equity. It trades about 0.17 of its potential returns per unit of risk. Stralem Equity Fund is currently generating about 0.04 per unit of risk. If you would invest 2,474 in Qs Large Cap on September 13, 2024 and sell it today you would earn a total of 131.00 from holding Qs Large Cap or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qs Large Cap vs. Stralem Equity Fund
Performance |
| Timeline |
| Qs Large Cap |
| Stralem Equity |
Qs Large and Stralem Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qs Large and Stralem Equity
The main advantage of trading using opposite Qs Large and Stralem Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qs Large position performs unexpectedly, Stralem Equity 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 Stralem Equity will offset losses from the drop in Stralem Equity's long position.| Qs Large vs. Putnam Money Market | Qs Large vs. John Hancock Money | Qs Large vs. Ubs Money Series | Qs Large vs. Aig Government Money |
| Stralem Equity vs. Locorr Market Trend | Stralem Equity vs. Calvert Developed Market | Stralem Equity vs. Aqr Long Short Equity | Stralem Equity vs. Extended Market Index |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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