Correlation Between Small Midcap and Lebenthal Lisanti
Can any of the company-specific risk be diversified away by investing in both Small Midcap 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 Small Midcap and Lebenthal Lisanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Midcap Dividend Income and Lebenthal Lisanti Small, you can compare the effects of market volatilities on Small Midcap 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 Small Midcap with a short position of Lebenthal Lisanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Midcap and Lebenthal Lisanti.
Diversification Opportunities for Small Midcap and Lebenthal Lisanti
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Small and Lebenthal is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Small Midcap Dividend Income 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 Small Midcap 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 Midcap Dividend Income 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 Small Midcap i.e., Small Midcap and Lebenthal Lisanti go up and down completely randomly.
Pair Corralation between Small Midcap and Lebenthal Lisanti
Assuming the 90 days horizon Small Midcap is expected to generate 1.16 times less return on investment than Lebenthal Lisanti. But when comparing it to its historical volatility, Small Midcap Dividend Income is 1.26 times less risky than Lebenthal Lisanti. It trades about 0.05 of its potential returns per unit of risk. Lebenthal Lisanti Small is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,664 in Lebenthal Lisanti Small on August 27, 2024 and sell it today you would earn a total of 565.00 from holding Lebenthal Lisanti Small or generate 33.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Midcap Dividend Income vs. Lebenthal Lisanti Small
Performance |
| Timeline |
| Small Midcap Dividend |
| Lebenthal Lisanti Small |
Small Midcap and Lebenthal Lisanti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Midcap and Lebenthal Lisanti
The main advantage of trading using opposite Small Midcap and Lebenthal Lisanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Midcap 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.| Small Midcap vs. Bbh Intermediate Municipal | Small Midcap vs. California Bond Fund | Small Midcap vs. Nuveen Minnesota Municipal | Small Midcap vs. Alliancebernstein National Municipal |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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