Correlation Between LHC and Smead Value
Can any of the company-specific risk be diversified away by investing in both LHC and Smead Value 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 LHC and Smead Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LHC Group and Smead Value Fund, you can compare the effects of market volatilities on LHC and Smead Value 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 LHC with a short position of Smead Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of LHC and Smead Value.
Diversification Opportunities for LHC and Smead Value
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LHC and Smead is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding LHC Group and Smead Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead Value Fund and LHC 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 LHC Group are associated (or correlated) with Smead Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Value Fund has no effect on the direction of LHC i.e., LHC and Smead Value go up and down completely randomly.
Pair Corralation between LHC and Smead Value
If you would invest 7,662 in Smead Value Fund on January 26, 2024 and sell it today you would earn a total of 522.00 from holding Smead Value Fund or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 1.61% |
| Values | Daily Returns |
LHC Group vs. Smead Value Fund
Performance |
| Timeline |
| LHC Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Smead Value Fund |
LHC and Smead Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LHC and Smead Value
The main advantage of trading using opposite LHC and Smead Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LHC position performs unexpectedly, Smead Value 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 Smead Value will offset losses from the drop in Smead Value's long position.| LHC vs. Barings BDC | LHC vs. Juniata Valley Financial | LHC vs. Awilco Drilling PLC | LHC vs. Artisan Partners Asset |
| Smead Value vs. Edgewood Growth Fund | Smead Value vs. Hartford Schroders Emerging | Smead Value vs. HUMANA INC | Smead Value vs. Aquagold International |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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