Correlation Between Lebenthal Lisanti and Ab Fixed-income

Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Ab Fixed-income 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 Ab Fixed-income 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 Ab Fixed Income Shares, you can compare the effects of market volatilities on Lebenthal Lisanti and Ab Fixed-income 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 Ab Fixed-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Ab Fixed-income.

Diversification Opportunities for Lebenthal Lisanti and Ab Fixed-income

0.0

Correlation Coefficient

Lebenthal Lisanti  Ab Fixed-income

Pay attention - limited upside

The 3 months correlation between Lebenthal and MYMXX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Ab Fixed Income Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Fixed Income 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 Ab Fixed-income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Fixed Income has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Ab Fixed-income go up and down completely randomly.

Pair Corralation between Lebenthal Lisanti and Ab Fixed-income

Assuming the 90 days horizon Lebenthal Lisanti is expected to generate 11.86 times less return on investment than Ab Fixed-income. But when comparing it to its historical volatility, Lebenthal Lisanti Small is 14.07 times less risky than Ab Fixed-income. It trades about 0.04 of its potential returns per unit of risk. Ab Fixed Income Shares is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  91.00  in Ab Fixed Income Shares on October 24, 2024 and sell it today you would earn a total of  9.00  from holding Ab Fixed Income Shares or generate 9.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.21%
Values	Daily Returns

Lebenthal Lisanti Small  vs.  Ab Fixed Income Shares

Lebenthal Lisanti Small

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lebenthal Lisanti Small are ranked lower than 7 (%) 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 February 2025.

Ab Fixed Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Fixed Income Shares has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ab Fixed-income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lebenthal Lisanti and Ab Fixed-income

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

The idea behind Lebenthal Lisanti Small and Ab Fixed Income Shares 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.