Correlation Between Swan Defined and Lgm Risk
Can any of the company-specific risk be diversified away by investing in both Swan Defined and Lgm Risk 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 Swan Defined and Lgm Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swan Defined Risk and Lgm Risk Managed, you can compare the effects of market volatilities on Swan Defined and Lgm Risk 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 Swan Defined with a short position of Lgm Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swan Defined and Lgm Risk.
Diversification Opportunities for Swan Defined and Lgm Risk
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Swan and Lgm is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Swan Defined Risk and Lgm Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lgm Risk Managed and Swan Defined 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 Swan Defined Risk are associated (or correlated) with Lgm Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lgm Risk Managed has no effect on the direction of Swan Defined i.e., Swan Defined and Lgm Risk go up and down completely randomly.
Pair Corralation between Swan Defined and Lgm Risk
Assuming the 90 days horizon Swan Defined Risk is expected to generate 2.14 times more return on investment than Lgm Risk. However, Swan Defined is 2.14 times more volatile than Lgm Risk Managed. It trades about 0.08 of its potential returns per unit of risk. Lgm Risk Managed is currently generating about 0.15 per unit of risk. If you would invest 1,180 in Swan Defined Risk on September 4, 2024 and sell it today you would earn a total of 197.00 from holding Swan Defined Risk or generate 16.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Swan Defined Risk vs. Lgm Risk Managed
Performance |
| Timeline |
| Swan Defined Risk |
| Lgm Risk Managed |
Swan Defined and Lgm Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swan Defined and Lgm Risk
The main advantage of trading using opposite Swan Defined and Lgm Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swan Defined position performs unexpectedly, Lgm Risk 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 Lgm Risk will offset losses from the drop in Lgm Risk's long position.| Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk | Swan Defined vs. Swan Defined Risk |
| Lgm Risk vs. Fuller Thaler Behavioral | Lgm Risk vs. The Gabelli Small | Lgm Risk vs. Davenport Small Cap | Lgm Risk vs. Northern Small 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |