Correlation Between Pace Smallmedium and Lebenthal Lisanti
Can any of the company-specific risk be diversified away by investing in both Pace Smallmedium and Lebenthal Lisanti 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 Pace Smallmedium and Lebenthal Lisanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Smallmedium Value and Lebenthal Lisanti Small, you can compare the effects of market volatilities on Pace Smallmedium and Lebenthal Lisanti 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 Pace Smallmedium with a short position of Lebenthal Lisanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Smallmedium and Lebenthal Lisanti.
Diversification Opportunities for Pace Smallmedium and Lebenthal Lisanti
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pace and Lebenthal is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Pace Smallmedium Value and Lebenthal Lisanti Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lebenthal Lisanti Small and Pace Smallmedium 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 Pace Smallmedium Value are associated (or correlated) with Lebenthal Lisanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lebenthal Lisanti Small has no effect on the direction of Pace Smallmedium i.e., Pace Smallmedium and Lebenthal Lisanti go up and down completely randomly.
Pair Corralation between Pace Smallmedium and Lebenthal Lisanti
Assuming the 90 days horizon Pace Smallmedium Value is expected to generate 0.78 times more return on investment than Lebenthal Lisanti. However, Pace Smallmedium Value is 1.29 times less risky than Lebenthal Lisanti. It trades about 0.28 of its potential returns per unit of risk. Lebenthal Lisanti Small is currently generating about 0.21 per unit of risk. If you would invest 1,963 in Pace Smallmedium Value on August 27, 2024 and sell it today you would earn a total of 152.00 from holding Pace Smallmedium Value or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Smallmedium Value vs. Lebenthal Lisanti Small
Performance |
| Timeline |
| Pace Smallmedium Value |
| Lebenthal Lisanti Small |
Pace Smallmedium and Lebenthal Lisanti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Smallmedium and Lebenthal Lisanti
The main advantage of trading using opposite Pace Smallmedium and Lebenthal Lisanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Smallmedium position performs unexpectedly, Lebenthal Lisanti 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 Lebenthal Lisanti will offset losses from the drop in Lebenthal Lisanti's long position.| Pace Smallmedium vs. Aig Government Money | Pace Smallmedium vs. Lord Abbett Government | Pace Smallmedium vs. Dunham Porategovernment Bond | Pace Smallmedium vs. Us Government Securities |
| Lebenthal Lisanti vs. Lord Abbett Growth | Lebenthal Lisanti vs. Queens Road Small | Lebenthal Lisanti vs. Eaton Vance Large 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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