Correlation Between Sarofim Equity and Lkcm Aquinas
Can any of the company-specific risk be diversified away by investing in both Sarofim Equity and Lkcm Aquinas 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 Sarofim Equity and Lkcm Aquinas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sarofim Equity and Lkcm Aquinas Catholic, you can compare the effects of market volatilities on Sarofim Equity and Lkcm Aquinas 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 Sarofim Equity with a short position of Lkcm Aquinas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarofim Equity and Lkcm Aquinas.
Diversification Opportunities for Sarofim Equity and Lkcm Aquinas
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sarofim and Lkcm is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sarofim Equity and Lkcm Aquinas Catholic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Aquinas Catholic and Sarofim Equity 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 Sarofim Equity are associated (or correlated) with Lkcm Aquinas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Aquinas Catholic has no effect on the direction of Sarofim Equity i.e., Sarofim Equity and Lkcm Aquinas go up and down completely randomly.
Pair Corralation between Sarofim Equity and Lkcm Aquinas
Assuming the 90 days horizon Sarofim Equity is expected to generate 1.86 times less return on investment than Lkcm Aquinas. In addition to that, Sarofim Equity is 1.22 times more volatile than Lkcm Aquinas Catholic. It trades about 0.05 of its total potential returns per unit of risk. Lkcm Aquinas Catholic is currently generating about 0.11 per unit of volatility. If you would invest 1,615 in Lkcm Aquinas Catholic on September 14, 2024 and sell it today you would earn a total of 358.00 from holding Lkcm Aquinas Catholic or generate 22.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sarofim Equity vs. Lkcm Aquinas Catholic
Performance |
| Timeline |
| Sarofim Equity |
| Lkcm Aquinas Catholic |
Sarofim Equity and Lkcm Aquinas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sarofim Equity and Lkcm Aquinas
The main advantage of trading using opposite Sarofim Equity and Lkcm Aquinas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarofim Equity position performs unexpectedly, Lkcm Aquinas 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 Aquinas will offset losses from the drop in Lkcm Aquinas' long position.| Sarofim Equity vs. Bbh Intermediate Municipal | Sarofim Equity vs. Alliancebernstein National Municipal | Sarofim Equity vs. Touchstone Premium Yield | Sarofim Equity vs. Ambrus Core Bond |
| Lkcm Aquinas vs. Qs International Equity | Lkcm Aquinas vs. Sarofim Equity | Lkcm Aquinas vs. Ms Global Fixed | Lkcm Aquinas vs. Rbc Global Equity |
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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