Correlation Between Vanguard Total and Lkcm International
Can any of the company-specific risk be diversified away by investing in both Vanguard Total 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 Vanguard Total and Lkcm International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and Lkcm International Equity, you can compare the effects of market volatilities on Vanguard Total 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 Vanguard Total with a short position of Lkcm International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Lkcm International.
Diversification Opportunities for Vanguard Total and Lkcm International
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and Lkcm is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock 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 Vanguard Total 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 Total Stock 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 Vanguard Total i.e., Vanguard Total and Lkcm International go up and down completely randomly.
Pair Corralation between Vanguard Total and Lkcm International
Assuming the 90 days horizon Vanguard Total Stock is expected to under-perform the Lkcm International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard Total Stock is 1.09 times less risky than Lkcm International. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Lkcm International Equity is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,381 in Lkcm International Equity on November 28, 2024 and sell it today you would earn a total of 13.00 from holding Lkcm International Equity or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Lkcm International Equity
Performance |
| Timeline |
| Vanguard Total Stock |
| Lkcm International Equity |
Vanguard Total and Lkcm International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Lkcm International
The main advantage of trading using opposite Vanguard Total and Lkcm International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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.| Vanguard Total vs. Fulcrum Diversified Absolute | Vanguard Total vs. Global Diversified Income | Vanguard Total vs. American Century Diversified | Vanguard Total vs. Massmutual Premier Diversified |
| Lkcm International vs. Nasdaq 100 2x Strategy | Lkcm International vs. Glg Intl Small | Lkcm International vs. Guidemark E Fixed | Lkcm International vs. Arrow Managed Futures |
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 CEOs Directory module to screen CEOs from public companies around the world.
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