Correlation Between Small Pany and Lkcm Small
Can any of the company-specific risk be diversified away by investing in both Small Pany 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 Small Pany and Lkcm Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Pany Growth and Lkcm Small Cap, you can compare the effects of market volatilities on Small Pany 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 Small Pany with a short position of Lkcm Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Pany and Lkcm Small.
Diversification Opportunities for Small Pany and Lkcm Small
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Small and LKCM is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Growth 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 Small Pany 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 Small Pany Growth 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 Small Pany i.e., Small Pany and Lkcm Small go up and down completely randomly.
Pair Corralation between Small Pany and Lkcm Small
Assuming the 90 days horizon Small Pany Growth is expected to generate 0.92 times more return on investment than Lkcm Small. However, Small Pany Growth is 1.09 times less risky than Lkcm Small. It trades about 0.02 of its potential returns per unit of risk. Lkcm Small Cap is currently generating about -0.14 per unit of risk. If you would invest 1,632 in Small Pany Growth on October 23, 2024 and sell it today you would earn a total of 7.00 from holding Small Pany Growth or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Pany Growth vs. Lkcm Small Cap
Performance |
| Timeline |
| Small Pany Growth |
| Lkcm Small Cap |
Small Pany and Lkcm Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Pany and Lkcm Small
The main advantage of trading using opposite Small Pany and Lkcm Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Pany 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.| Small Pany vs. Growth Portfolio Class | Small Pany vs. Morgan Stanley Multi | Small Pany vs. Aquagold International | Small Pany vs. Morningstar Unconstrained Allocation |
| Lkcm Small vs. The Gold Bullion | Lkcm Small vs. Sprott Gold Equity | Lkcm Small vs. Vy Goldman Sachs | Lkcm Small vs. Goldman Sachs Multi Manager |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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