Correlation Between LHA Market and Listed Funds
Can any of the company-specific risk be diversified away by investing in both LHA Market and Listed Funds 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 LHA Market and Listed Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LHA Market State and Listed Funds Trust, you can compare the effects of market volatilities on LHA Market and Listed Funds 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 LHA Market with a short position of Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of LHA Market and Listed Funds.
Diversification Opportunities for LHA Market and Listed Funds
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between LHA and Listed is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding LHA Market State and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust and LHA Market 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 LHA Market State are associated (or correlated) with Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of LHA Market i.e., LHA Market and Listed Funds go up and down completely randomly.
Pair Corralation between LHA Market and Listed Funds
Given the investment horizon of 90 days LHA Market State is expected to generate 1.08 times more return on investment than Listed Funds. However, LHA Market is 1.08 times more volatile than Listed Funds Trust. It trades about 0.15 of its potential returns per unit of risk. Listed Funds Trust is currently generating about -0.1 per unit of risk. If you would invest 2,195 in LHA Market State on September 12, 2024 and sell it today you would earn a total of 42.00 from holding LHA Market State or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LHA Market State vs. Listed Funds Trust
Performance |
| Timeline |
| LHA Market State |
| Listed Funds Trust |
LHA Market and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LHA Market and Listed Funds
The main advantage of trading using opposite LHA Market and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LHA Market position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position.| LHA Market vs. Alpha Architect Quantitative | LHA Market vs. Alpha Architect International | LHA Market vs. Alpha Architect International | LHA Market vs. Alpha Architect Quantitative |
| Listed Funds vs. Alpha Architect Quantitative | Listed Funds vs. Alpha Architect International | Listed Funds vs. Alpha Architect International | Listed Funds vs. Alpha Architect Quantitative |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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