Correlation Between Nuveen Small and Lebenthal Lisanti

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

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

Diversification Opportunities for Nuveen Small and Lebenthal Lisanti

0.91

Correlation Coefficient

Nuveen Small  Lebenthal Lisanti

Almost no diversification

The 3 months correlation between Nuveen and Lebenthal is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Small Cap and Lebenthal Lisanti Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lebenthal Lisanti Small and Nuveen 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 Nuveen Small Cap are associated (or correlated) with Lebenthal Lisanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lebenthal Lisanti Small has no effect on the direction of Nuveen Small i.e., Nuveen Small and Lebenthal Lisanti go up and down completely randomly.

Pair Corralation between Nuveen Small and Lebenthal Lisanti

Assuming the 90 days horizon Nuveen Small is expected to generate 1.32 times less return on investment than Lebenthal Lisanti. In addition to that, Nuveen Small is 1.03 times more volatile than Lebenthal Lisanti Small. It trades about 0.15 of its total potential returns per unit of risk. Lebenthal Lisanti Small is currently generating about 0.21 per unit of volatility. If you would invest  1,905  in Lebenthal Lisanti Small on September 3, 2024 and sell it today you would earn a total of  340.00  from holding Lebenthal Lisanti Small or generate 17.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Nuveen Small Cap  vs.  Lebenthal Lisanti Small

Nuveen Small Cap

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Small Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nuveen Small showed solid returns over the last few months and may actually be approaching a breakup point.

Lebenthal Lisanti Small

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lebenthal Lisanti Small are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Lebenthal Lisanti showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nuveen Small and Lebenthal Lisanti

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

The idea behind Nuveen Small Cap and Lebenthal Lisanti 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.