Correlation Between Perella Weinberg and LPL Financial

Can any of the company-specific risk be diversified away by investing in both Perella Weinberg and LPL Financial 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 Perella Weinberg and LPL Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Perella Weinberg Partners and LPL Financial Holdings, you can compare the effects of market volatilities on Perella Weinberg and LPL Financial 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 Perella Weinberg with a short position of LPL Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perella Weinberg and LPL Financial.

Diversification Opportunities for Perella Weinberg and LPL Financial

0.15

Correlation Coefficient

Perella Weinberg  LPL Financial

Average diversification

The 3 months correlation between Perella and LPL is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Perella Weinberg Partners and LPL Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPL Financial Holdings and Perella Weinberg 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 Perella Weinberg Partners are associated (or correlated) with LPL Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPL Financial Holdings has no effect on the direction of Perella Weinberg i.e., Perella Weinberg and LPL Financial go up and down completely randomly.

Pair Corralation between Perella Weinberg and LPL Financial

Considering the 90-day investment horizon Perella Weinberg Partners is expected to under-perform the LPL Financial. In addition to that, Perella Weinberg is 1.74 times more volatile than LPL Financial Holdings. It trades about -0.15 of its total potential returns per unit of risk. LPL Financial Holdings is currently generating about 0.09 per unit of volatility. If you would invest  35,275  in LPL Financial Holdings on November 28, 2024 and sell it today you would earn a total of  945.00  from holding LPL Financial Holdings or generate 2.68% return on investment over 90 days.

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

Perella Weinberg Partners  vs.  LPL Financial Holdings

Perella Weinberg Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perella Weinberg Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

LPL Financial Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LPL Financial Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal essential indicators, LPL Financial may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Perella Weinberg and LPL Financial

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

The idea behind Perella Weinberg Partners and LPL Financial Holdings 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.