Correlation Between Siit High and Lkcm Small
Can any of the company-specific risk be diversified away by investing in both Siit High and Lkcm Small 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 Siit High and Lkcm Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit High Yield and Lkcm Small Cap, you can compare the effects of market volatilities on Siit High and Lkcm Small 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 Siit High with a short position of Lkcm Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Lkcm Small.
Diversification Opportunities for Siit High and Lkcm Small
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Siit and Lkcm is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and Lkcm Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Small Cap and Siit High 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 Siit High Yield are associated (or correlated) with Lkcm Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Small Cap has no effect on the direction of Siit High i.e., Siit High and Lkcm Small go up and down completely randomly.
Pair Corralation between Siit High and Lkcm Small
Assuming the 90 days horizon Siit High Yield is expected to generate 0.23 times more return on investment than Lkcm Small. However, Siit High Yield is 4.37 times less risky than Lkcm Small. It trades about 0.23 of its potential returns per unit of risk. Lkcm Small Cap is currently generating about 0.03 per unit of risk. If you would invest 713.00 in Siit High Yield on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Siit High Yield or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Siit High Yield vs. Lkcm Small Cap
Performance |
| Timeline |
| Siit High Yield |
| Lkcm Small Cap |
Siit High and Lkcm Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit High and Lkcm Small
The main advantage of trading using opposite Siit High and Lkcm Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High position performs unexpectedly, Lkcm Small 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 Small will offset losses from the drop in Lkcm Small's long position.| Siit High vs. John Hancock Financial | Siit High vs. Davis Financial Fund | Siit High vs. Goldman Sachs Financial | Siit High vs. Fidelity Advisor Financial |
| Lkcm Small vs. Gabelli Convertible And | Lkcm Small vs. Fidelity Sai Convertible | Lkcm Small vs. Rationalpier 88 Convertible | Lkcm Small vs. Calamos Dynamic Convertible |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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