Correlation Between Lsv Small and Edward Jones

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

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

Diversification Opportunities for Lsv Small and Edward Jones

0.0

Correlation Coefficient

Lsv Small  Edward Jones

Pay attention - limited upside

The 3 months correlation between Lsv and Edward is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Small Cap and Edward Jones Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edward Jones Money and Lsv 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 Lsv Small Cap are associated (or correlated) with Edward Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edward Jones Money has no effect on the direction of Lsv Small i.e., Lsv Small and Edward Jones go up and down completely randomly.

Pair Corralation between Lsv Small and Edward Jones

Assuming the 90 days horizon Lsv Small is expected to generate 11.22 times less return on investment than Edward Jones. But when comparing it to its historical volatility, Lsv Small Cap is 13.46 times less risky than Edward Jones. It trades about 0.04 of its potential returns per unit of risk. Edward Jones Money is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  95.00  in Edward Jones Money on October 5, 2024 and sell it today you would earn a total of  5.00  from holding Edward Jones Money or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.34%
Values	Daily Returns

Lsv Small Cap  vs.  Edward Jones Money

Lsv Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Edward Jones Money

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Lsv Small and Edward Jones

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

The idea behind Lsv Small Cap and Edward Jones Money 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.