Correlation Between Us Government and Lkcm International
Can any of the company-specific risk be diversified away by investing in both Us Government and Lkcm International 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 Us Government and Lkcm International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Lkcm International Equity, you can compare the effects of market volatilities on Us Government and Lkcm International 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 Us Government with a short position of Lkcm International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Lkcm International.
Diversification Opportunities for Us Government and Lkcm International
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USGFX and Lkcm is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities and Lkcm International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm International Equity and Us Government 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 Us Government Securities are associated (or correlated) with Lkcm International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm International Equity has no effect on the direction of Us Government i.e., Us Government and Lkcm International go up and down completely randomly.
Pair Corralation between Us Government and Lkcm International
Assuming the 90 days horizon Us Government Securities is expected to generate 0.38 times more return on investment than Lkcm International. However, Us Government Securities is 2.62 times less risky than Lkcm International. It trades about 0.08 of its potential returns per unit of risk. Lkcm International Equity is currently generating about 0.0 per unit of risk. If you would invest 1,154 in Us Government Securities on September 1, 2024 and sell it today you would earn a total of 40.00 from holding Us Government Securities or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Us Government Securities vs. Lkcm International Equity
Performance |
| Timeline |
| Us Government Securities |
| Lkcm International Equity |
Us Government and Lkcm International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Lkcm International
The main advantage of trading using opposite Us Government and Lkcm International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government position performs unexpectedly, Lkcm International 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 International will offset losses from the drop in Lkcm International's long position.| Us Government vs. Government Securities Fund | Us Government vs. John Hancock Government | Us Government vs. Short Term Government Fund | Us Government vs. Blackrock Government Bond |
| Lkcm International vs. Lkcm Aquinas Catholic | Lkcm International vs. Lkcm Balanced Fund | Lkcm International vs. Lkcm Equity Fund | Lkcm International vs. Lkcm Fixed Income |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |