Correlation Between Lkcm Equity and Lkcm Aquinas
Can any of the company-specific risk be diversified away by investing in both Lkcm Equity and Lkcm Aquinas 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 Lkcm Equity and Lkcm Aquinas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lkcm Equity Fund and Lkcm Aquinas Catholic, you can compare the effects of market volatilities on Lkcm Equity and Lkcm Aquinas 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 Lkcm Equity with a short position of Lkcm Aquinas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Equity and Lkcm Aquinas.
Diversification Opportunities for Lkcm Equity and Lkcm Aquinas
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Lkcm and Lkcm is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Equity Fund and Lkcm Aquinas Catholic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Aquinas Catholic and Lkcm Equity 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 Lkcm Equity Fund are associated (or correlated) with Lkcm Aquinas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Aquinas Catholic has no effect on the direction of Lkcm Equity i.e., Lkcm Equity and Lkcm Aquinas go up and down completely randomly.
Pair Corralation between Lkcm Equity and Lkcm Aquinas
Assuming the 90 days horizon Lkcm Equity Fund is expected to under-perform the Lkcm Aquinas. But the mutual fund apears to be less risky and, when comparing its historical volatility, Lkcm Equity Fund is 1.1 times less risky than Lkcm Aquinas. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Lkcm Aquinas Catholic is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 1,993 in Lkcm Aquinas Catholic on December 1, 2024 and sell it today you would lose (205.00) from holding Lkcm Aquinas Catholic or give up 10.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.36% |
Values | Daily Returns |
Lkcm Equity Fund vs. Lkcm Aquinas Catholic
Performance |
Timeline |
Lkcm Equity Fund |
Lkcm Aquinas Catholic |
Lkcm Equity and Lkcm Aquinas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lkcm Equity and Lkcm Aquinas
The main advantage of trading using opposite Lkcm Equity and Lkcm Aquinas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Equity position performs unexpectedly, Lkcm Aquinas 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 Aquinas will offset losses from the drop in Lkcm Aquinas' long position.Lkcm Equity vs. Goldman Sachs Emerging | Lkcm Equity vs. Shelton Emerging Markets | Lkcm Equity vs. Doubleline Emerging Markets | Lkcm Equity vs. Hartford Schroders Emerging |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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