Correlation Between Lebenthal Lisanti and Washington Mutual
Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Washington Mutual 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 Lebenthal Lisanti and Washington Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lebenthal Lisanti Small and Washington Mutual Investors, you can compare the effects of market volatilities on Lebenthal Lisanti and Washington Mutual 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 Lebenthal Lisanti with a short position of Washington Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Washington Mutual.
Diversification Opportunities for Lebenthal Lisanti and Washington Mutual
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lebenthal and Washington is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Washington Mutual Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Mutual and Lebenthal Lisanti 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 Lebenthal Lisanti Small are associated (or correlated) with Washington Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Mutual has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Washington Mutual go up and down completely randomly.
Pair Corralation between Lebenthal Lisanti and Washington Mutual
Assuming the 90 days horizon Lebenthal Lisanti Small is expected to generate 1.88 times more return on investment than Washington Mutual. However, Lebenthal Lisanti is 1.88 times more volatile than Washington Mutual Investors. It trades about 0.08 of its potential returns per unit of risk. Washington Mutual Investors is currently generating about 0.06 per unit of risk. If you would invest 1,817 in Lebenthal Lisanti Small on March 5, 2024 and sell it today you would earn a total of 111.00 from holding Lebenthal Lisanti Small or generate 6.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Lebenthal Lisanti Small vs. Washington Mutual Investors
Performance |
Timeline |
Lebenthal Lisanti Small |
Washington Mutual |
Lebenthal Lisanti and Washington Mutual Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lebenthal Lisanti and Washington Mutual
The main advantage of trading using opposite Lebenthal Lisanti and Washington Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti position performs unexpectedly, Washington Mutual 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 Washington Mutual will offset losses from the drop in Washington Mutual's long position.Lebenthal Lisanti vs. Perritt Ultra Microcap | Lebenthal Lisanti vs. Eaton Vance Large Cap | Lebenthal Lisanti vs. Aquagold International | Lebenthal Lisanti vs. Morningstar Unconstrained Allocation |
Washington Mutual vs. Income Fund Of | Washington Mutual vs. New World Fund | Washington Mutual vs. American Mutual Fund | Washington Mutual vs. American Mutual Fund |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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