Correlation Between Lkcm Small and Gabelli Convertible

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

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

Diversification Opportunities for Lkcm Small and Gabelli Convertible

0.57

Correlation Coefficient

Lkcm Small  Gabelli Convertible

Very weak diversification

The 3 months correlation between LKCM and Gabelli is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Small Cap and Gabelli Convertible And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Convertible And and Lkcm Small 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 Small Cap are associated (or correlated) with Gabelli Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Convertible And has no effect on the direction of Lkcm Small i.e., Lkcm Small and Gabelli Convertible go up and down completely randomly.

Pair Corralation between Lkcm Small and Gabelli Convertible

Assuming the 90 days horizon Lkcm Small Cap is expected to under-perform the Gabelli Convertible. In addition to that, Lkcm Small is 1.55 times more volatile than Gabelli Convertible And. It trades about -0.14 of its total potential returns per unit of risk. Gabelli Convertible And is currently generating about 0.13 per unit of volatility. If you would invest  377.00  in Gabelli Convertible And on October 22, 2024 and sell it today you would earn a total of  11.00  from holding Gabelli Convertible And or generate 2.92% return on investment over 90 days.

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

Lkcm Small Cap  vs.  Gabelli Convertible And

Lkcm Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gabelli Convertible And

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Convertible And are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Gabelli Convertible may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Lkcm Small and Gabelli Convertible

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

The idea behind Lkcm Small Cap and Gabelli Convertible And 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 CEOs Directory module to screen CEOs from public companies around the world.