Correlation Between Lebenthal Lisanti and Columbia Integrated

Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Columbia Integrated 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 Columbia Integrated 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 Columbia Integrated Small, you can compare the effects of market volatilities on Lebenthal Lisanti and Columbia Integrated 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 Columbia Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Columbia Integrated.

Diversification Opportunities for Lebenthal Lisanti and Columbia Integrated

0.78

Correlation Coefficient

Lebenthal Lisanti  Columbia Integrated

Poor diversification

The 3 months correlation between Lebenthal and Columbia is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Columbia Integrated Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Integrated Small 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 Columbia Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Integrated Small has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Columbia Integrated go up and down completely randomly.

Pair Corralation between Lebenthal Lisanti and Columbia Integrated

Assuming the 90 days horizon Lebenthal Lisanti is expected to generate 4.16 times less return on investment than Columbia Integrated. In addition to that, Lebenthal Lisanti is 1.09 times more volatile than Columbia Integrated Small. It trades about 0.05 of its total potential returns per unit of risk. Columbia Integrated Small is currently generating about 0.21 per unit of volatility. If you would invest  1,568  in Columbia Integrated Small on September 22, 2024 and sell it today you would earn a total of  200.00  from holding Columbia Integrated Small or generate 12.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	73.44%
Values	Daily Returns

Lebenthal Lisanti Small  vs.  Columbia Integrated Small

Lebenthal Lisanti Small

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lebenthal Lisanti Small are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Lebenthal Lisanti is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Columbia Integrated Small

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Columbia Integrated Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak essential indicators, Columbia Integrated showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lebenthal Lisanti and Columbia Integrated

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

The idea behind Lebenthal Lisanti Small and Columbia Integrated 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.