Correlation Between Precious Metals and Lkcm Small-mid
Can any of the company-specific risk be diversified away by investing in both Precious Metals and Lkcm Small-mid 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 Precious Metals and Lkcm Small-mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precious Metals And and Lkcm Small Mid Cap, you can compare the effects of market volatilities on Precious Metals and Lkcm Small-mid 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 Precious Metals with a short position of Lkcm Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precious Metals and Lkcm Small-mid.
Diversification Opportunities for Precious Metals and Lkcm Small-mid
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Precious and Lkcm is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Precious Metals And and Lkcm Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm Small Mid and Precious Metals 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 Precious Metals And are associated (or correlated) with Lkcm Small-mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Small Mid has no effect on the direction of Precious Metals i.e., Precious Metals and Lkcm Small-mid go up and down completely randomly.
Pair Corralation between Precious Metals and Lkcm Small-mid
Assuming the 90 days horizon Precious Metals And is expected to generate 1.71 times more return on investment than Lkcm Small-mid. However, Precious Metals is 1.71 times more volatile than Lkcm Small Mid Cap. It trades about 0.1 of its potential returns per unit of risk. Lkcm Small Mid Cap is currently generating about -0.14 per unit of risk. If you would invest 2,073 in Precious Metals And on December 1, 2024 and sell it today you would earn a total of 202.00 from holding Precious Metals And or generate 9.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Precious Metals And vs. Lkcm Small Mid Cap
Performance |
Timeline |
Precious Metals And |
Lkcm Small Mid |
Precious Metals and Lkcm Small-mid Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Precious Metals and Lkcm Small-mid
The main advantage of trading using opposite Precious Metals and Lkcm Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precious Metals position performs unexpectedly, Lkcm Small-mid 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 Small-mid will offset losses from the drop in Lkcm Small-mid's long position.Precious Metals vs. Rationalpier 88 Convertible | Precious Metals vs. Absolute Convertible Arbitrage | Precious Metals vs. Virtus Convertible | Precious Metals vs. Putnam Vertible Securities |
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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.
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