Correlation Between Capital Income and Leuthold Global
Can any of the company-specific risk be diversified away by investing in both Capital Income and Leuthold Global 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 Capital Income and Leuthold Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and Leuthold Global Fund, you can compare the effects of market volatilities on Capital Income and Leuthold Global 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 Capital Income with a short position of Leuthold Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and Leuthold Global.
Diversification Opportunities for Capital Income and Leuthold Global
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and Leuthold is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder and Leuthold Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leuthold Global and Capital Income 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 Capital Income Builder are associated (or correlated) with Leuthold Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leuthold Global has no effect on the direction of Capital Income i.e., Capital Income and Leuthold Global go up and down completely randomly.
Pair Corralation between Capital Income and Leuthold Global
Assuming the 90 days horizon Capital Income Builder is expected to generate 0.24 times more return on investment than Leuthold Global. However, Capital Income Builder is 4.12 times less risky than Leuthold Global. It trades about 0.01 of its potential returns per unit of risk. Leuthold Global Fund is currently generating about -0.28 per unit of risk. If you would invest 7,228 in Capital Income Builder on September 14, 2024 and sell it today you would earn a total of 6.00 from holding Capital Income Builder or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Income Builder vs. Leuthold Global Fund
Performance |
| Timeline |
| Capital Income Builder |
| Leuthold Global |
Capital Income and Leuthold Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and Leuthold Global
The main advantage of trading using opposite Capital Income and Leuthold Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income position performs unexpectedly, Leuthold Global 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 Leuthold Global will offset losses from the drop in Leuthold Global's long position.| Capital Income vs. Small Cap Stock | Capital Income vs. Balanced Fund Investor | Capital Income vs. Volumetric Fund Volumetric | Capital Income vs. Ab Small Cap |
| Leuthold Global vs. Leuthold Select Industries | Leuthold Global vs. Leuthold E Investment | Leuthold Global vs. Leuthold E Investment | Leuthold Global vs. Grizzly Short Fund |
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 CEOs Directory module to screen CEOs from public companies around the world.
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