Correlation Between Lkcm Fixed and Cb Large

Can any of the company-specific risk be diversified away by investing in both Lkcm Fixed and Cb Large 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 Fixed and Cb Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lkcm Fixed Income and Cb Large Cap, you can compare the effects of market volatilities on Lkcm Fixed and Cb Large 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 Fixed with a short position of Cb Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Fixed and Cb Large.

Diversification Opportunities for Lkcm Fixed and Cb Large

-0.41

Correlation Coefficient

Lkcm Fixed  Cb Large

Very good diversification

The 3 months correlation between Lkcm and CBLSX is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Fixed Income and Cb Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cb Large Cap and Lkcm Fixed 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 Fixed Income are associated (or correlated) with Cb Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cb Large Cap has no effect on the direction of Lkcm Fixed i.e., Lkcm Fixed and Cb Large go up and down completely randomly.

Pair Corralation between Lkcm Fixed and Cb Large

Assuming the 90 days horizon Lkcm Fixed Income is expected to under-perform the Cb Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Lkcm Fixed Income is 3.31 times less risky than Cb Large. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Cb Large Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,368  in Cb Large Cap on September 13, 2024 and sell it today you would earn a total of  39.00  from holding Cb Large Cap or generate 2.85% return on investment over 90 days.

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

Lkcm Fixed Income  vs.  Cb Large Cap

Lkcm Fixed Income

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cb Large Cap

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cb Large Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Cb Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lkcm Fixed and Cb Large

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

The idea behind Lkcm Fixed Income and Cb Large Cap 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.