Correlation Between Locorr Longshort and Ladenburg Growth

Can any of the company-specific risk be diversified away by investing in both Locorr Longshort and Ladenburg Growth 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 Locorr Longshort and Ladenburg Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Locorr Longshort Modities and Ladenburg Growth, you can compare the effects of market volatilities on Locorr Longshort and Ladenburg Growth 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 Locorr Longshort with a short position of Ladenburg Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locorr Longshort and Ladenburg Growth.

Diversification Opportunities for Locorr Longshort and Ladenburg Growth

-0.76

Correlation Coefficient

Locorr Longshort  Ladenburg Growth

Pay attention - limited upside

The 3 months correlation between Locorr and Ladenburg is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Locorr Longshort Modities and Ladenburg Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Growth and Locorr Longshort 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 Locorr Longshort Modities are associated (or correlated) with Ladenburg Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Growth has no effect on the direction of Locorr Longshort i.e., Locorr Longshort and Ladenburg Growth go up and down completely randomly.

Pair Corralation between Locorr Longshort and Ladenburg Growth

Assuming the 90 days horizon Locorr Longshort Modities is expected to under-perform the Ladenburg Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Locorr Longshort Modities is 2.57 times less risky than Ladenburg Growth. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Ladenburg Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,385  in Ladenburg Growth on September 4, 2024 and sell it today you would earn a total of  531.00  from holding Ladenburg Growth or generate 38.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Locorr Longshort Modities  vs.  Ladenburg Growth

Locorr Longshort Modities

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ladenburg Growth

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ladenburg Growth are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ladenburg Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Locorr Longshort and Ladenburg Growth

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

The idea behind Locorr Longshort Modities and Ladenburg Growth 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.