Correlation Between Lebenthal Lisanti and Hartford International

Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Hartford 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 Lebenthal Lisanti and Hartford International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lebenthal Lisanti Small and Hartford International Equity, you can compare the effects of market volatilities on Lebenthal Lisanti and Hartford 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 Lebenthal Lisanti with a short position of Hartford International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Hartford International.

Diversification Opportunities for Lebenthal Lisanti and Hartford International

-0.58

Correlation Coefficient

Lebenthal Lisanti  Hartford International

Excellent diversification

The 3 months correlation between Lebenthal and Hartford is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Hartford International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford International and Lebenthal Lisanti 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 Lebenthal Lisanti Small are associated (or correlated) with Hartford International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford International has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Hartford International go up and down completely randomly.

Pair Corralation between Lebenthal Lisanti and Hartford International

Assuming the 90 days horizon Lebenthal Lisanti Small is expected to under-perform the Hartford International. In addition to that, Lebenthal Lisanti is 2.26 times more volatile than Hartford International Equity. It trades about -0.12 of its total potential returns per unit of risk. Hartford International Equity is currently generating about -0.04 per unit of volatility. If you would invest  1,230  in Hartford International Equity on September 27, 2024 and sell it today you would lose (7.00) from holding Hartford International Equity or give up 0.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lebenthal Lisanti Small  vs.  Hartford International Equity

Lebenthal Lisanti Small

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lebenthal Lisanti Small are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Lebenthal Lisanti may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hartford International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hartford International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Lebenthal Lisanti and Hartford International

The main advantage of trading using opposite Lebenthal Lisanti and Hartford International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti position performs unexpectedly, Hartford 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 Hartford International will offset losses from the drop in Hartford International's long position.

The idea behind Lebenthal Lisanti Small and Hartford International Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.