Correlation Between Lkcm Small-mid and Real Estate
Can any of the company-specific risk be diversified away by investing in both Lkcm Small-mid and Real Estate 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-mid and Real Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lkcm Small Mid Cap and Real Estate Ultrasector, you can compare the effects of market volatilities on Lkcm Small-mid and Real Estate 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-mid with a short position of Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Small-mid and Real Estate.
Diversification Opportunities for Lkcm Small-mid and Real Estate
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lkcm and Real is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Small Mid Cap and Real Estate Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Ultrasector and Lkcm Small-mid 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 Mid Cap are associated (or correlated) with Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Ultrasector has no effect on the direction of Lkcm Small-mid i.e., Lkcm Small-mid and Real Estate go up and down completely randomly.
Pair Corralation between Lkcm Small-mid and Real Estate
Assuming the 90 days horizon Lkcm Small Mid Cap is expected to generate 0.79 times more return on investment than Real Estate. However, Lkcm Small Mid Cap is 1.27 times less risky than Real Estate. It trades about 0.17 of its potential returns per unit of risk. Real Estate Ultrasector is currently generating about 0.13 per unit of risk. If you would invest 989.00 in Lkcm Small Mid Cap on September 6, 2024 and sell it today you would earn a total of 248.00 from holding Lkcm Small Mid Cap or generate 25.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lkcm Small Mid Cap vs. Real Estate Ultrasector
Performance |
Timeline |
Lkcm Small Mid |
Real Estate Ultrasector |
Lkcm Small-mid and Real Estate Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lkcm Small-mid and Real Estate
The main advantage of trading using opposite Lkcm Small-mid and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Small-mid position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.Lkcm Small-mid vs. Goldman Sachs Financial | Lkcm Small-mid vs. Vanguard Financials Index | Lkcm Small-mid vs. Fidelity Advisor Financial | Lkcm Small-mid vs. Financial Industries Fund |
Real Estate vs. Pace Large Growth | Real Estate vs. Strategic Allocation Aggressive | Real Estate vs. Enhanced Large Pany | Real Estate vs. Rational Strategic Allocation |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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