Correlation Between Spire Global and Lkcm Balanced

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

By analyzing existing cross correlation between Spire Global and Lkcm Balanced Fund, you can compare the effects of market volatilities on Spire Global and Lkcm Balanced 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 Spire Global with a short position of Lkcm Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Lkcm Balanced.

Diversification Opportunities for Spire Global and Lkcm Balanced

0.77

Correlation Coefficient

Spire Global  Lkcm Balanced

Poor diversification

The 3 months correlation between Spire and Lkcm is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Lkcm Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Balanced and Spire Global 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 Spire Global are associated (or correlated) with Lkcm Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Balanced has no effect on the direction of Spire Global i.e., Spire Global and Lkcm Balanced go up and down completely randomly.

Pair Corralation between Spire Global and Lkcm Balanced

Given the investment horizon of 90 days Spire Global is expected to generate 9.8 times more return on investment than Lkcm Balanced. However, Spire Global is 9.8 times more volatile than Lkcm Balanced Fund. It trades about 0.27 of its potential returns per unit of risk. Lkcm Balanced Fund is currently generating about 0.19 per unit of risk. If you would invest  830.00  in Spire Global on September 3, 2024 and sell it today you would earn a total of  804.00  from holding Spire Global or generate 96.87% return on investment over 90 days.

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

Spire Global  vs.  Lkcm Balanced Fund

Spire Global

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spire Global are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, Spire Global reported solid returns over the last few months and may actually be approaching a breakup point.

Lkcm Balanced

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lkcm Balanced Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lkcm Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Spire Global and Lkcm Balanced

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

The idea behind Spire Global and Lkcm Balanced Fund 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.