Correlation Between Ultra Short and Lkcm Equity
Can any of the company-specific risk be diversified away by investing in both Ultra Short and Lkcm 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 Ultra Short and Lkcm Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultra Short Income and Lkcm Equity Fund, you can compare the effects of market volatilities on Ultra Short and Lkcm 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 Ultra Short with a short position of Lkcm Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Short and Lkcm Equity.
Diversification Opportunities for Ultra Short and Lkcm Equity
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ultra and Lkcm is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Short Income and Lkcm Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Equity Fund and Ultra Short 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 Ultra Short Income are associated (or correlated) with Lkcm Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Equity Fund has no effect on the direction of Ultra Short i.e., Ultra Short and Lkcm Equity go up and down completely randomly.
Pair Corralation between Ultra Short and Lkcm Equity
Assuming the 90 days horizon Ultra Short Income is expected to generate 0.06 times more return on investment than Lkcm Equity. However, Ultra Short Income is 18.17 times less risky than Lkcm Equity. It trades about 0.23 of its potential returns per unit of risk. Lkcm Equity Fund is currently generating about -0.14 per unit of risk. If you would invest 995.00 in Ultra Short Income on October 21, 2024 and sell it today you would earn a total of 4.00 from holding Ultra Short Income or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Short Income vs. Lkcm Equity Fund
Performance |
| Timeline |
| Ultra Short Income |
| Lkcm Equity Fund |
Ultra Short and Lkcm Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Short and Lkcm Equity
The main advantage of trading using opposite Ultra Short and Lkcm Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Short position performs unexpectedly, Lkcm 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 Lkcm Equity will offset losses from the drop in Lkcm Equity's long position.| Ultra Short vs. Emerging Markets Equity | Ultra Short vs. Global Fixed Income | Ultra Short vs. Global Fixed Income | Ultra Short vs. Global Fixed Income |
| Lkcm Equity vs. Lkcm Aquinas Catholic | Lkcm Equity vs. Lkcm Balanced Fund | Lkcm Equity vs. Lkcm Fixed Income | Lkcm Equity vs. Lkcm International Equity |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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