Correlation Between Wasatch Small and Lkcm Aquinas

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

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

Diversification Opportunities for Wasatch Small and Lkcm Aquinas

0.0

Correlation Coefficient

Wasatch Small  Lkcm Aquinas

Pay attention - limited upside

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

Pair Corralation between Wasatch Small and Lkcm Aquinas

If you would invest (100.00) in Lkcm Aquinas Small on November 29, 2024 and sell it today you would earn a total of  100.00  from holding Lkcm Aquinas Small or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Wasatch Small Cap  vs.  Lkcm Aquinas Small

Wasatch Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wasatch Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Lkcm Aquinas Small

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Wasatch Small and Lkcm Aquinas

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

The idea behind Wasatch Small Cap and Lkcm Aquinas Small 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.