Correlation Between Vanguard Global and Lebenthal Lisanti
Can any of the company-specific risk be diversified away by investing in both Vanguard Global and Lebenthal Lisanti 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 Vanguard Global and Lebenthal Lisanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Global Minimum and Lebenthal Lisanti Small, you can compare the effects of market volatilities on Vanguard Global and Lebenthal Lisanti 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 Vanguard Global with a short position of Lebenthal Lisanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and Lebenthal Lisanti.
Diversification Opportunities for Vanguard Global and Lebenthal Lisanti
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Lebenthal is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Minimum and Lebenthal Lisanti Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lebenthal Lisanti Small and Vanguard Global 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 Vanguard Global Minimum are associated (or correlated) with Lebenthal Lisanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lebenthal Lisanti Small has no effect on the direction of Vanguard Global i.e., Vanguard Global and Lebenthal Lisanti go up and down completely randomly.
Pair Corralation between Vanguard Global and Lebenthal Lisanti
Assuming the 90 days horizon Vanguard Global is expected to generate 5.3 times less return on investment than Lebenthal Lisanti. But when comparing it to its historical volatility, Vanguard Global Minimum is 2.81 times less risky than Lebenthal Lisanti. It trades about 0.1 of its potential returns per unit of risk. Lebenthal Lisanti Small is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,029 in Lebenthal Lisanti Small on August 28, 2024 and sell it today you would earn a total of 225.00 from holding Lebenthal Lisanti Small or generate 11.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Global Minimum vs. Lebenthal Lisanti Small
Performance |
| Timeline |
| Vanguard Global Minimum |
| Lebenthal Lisanti Small |
Vanguard Global and Lebenthal Lisanti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Global and Lebenthal Lisanti
The main advantage of trading using opposite Vanguard Global and Lebenthal Lisanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global position performs unexpectedly, Lebenthal Lisanti 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 Lebenthal Lisanti will offset losses from the drop in Lebenthal Lisanti's long position.| Vanguard Global vs. Vanguard Emerging Markets | Vanguard Global vs. Vanguard Explorer Value | Vanguard Global vs. Vanguard Global Wellington | Vanguard Global vs. Vanguard Ultra Short Term Bond |
| Lebenthal Lisanti vs. Lord Abbett Growth | Lebenthal Lisanti vs. Queens Road Small | Lebenthal Lisanti vs. Eaton Vance Large 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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