Correlation Between Edgar Lomax and Lsv Managed

Can any of the company-specific risk be diversified away by investing in both Edgar Lomax and Lsv Managed 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 Edgar Lomax and Lsv Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Edgar Lomax Value and Lsv Managed Volatility, you can compare the effects of market volatilities on Edgar Lomax and Lsv Managed 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 Edgar Lomax with a short position of Lsv Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgar Lomax and Lsv Managed.

Diversification Opportunities for Edgar Lomax and Lsv Managed

0.54

Correlation Coefficient

Edgar Lomax  Lsv Managed

Very weak diversification

The 3 months correlation between Edgar and Lsv is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Edgar Lomax Value and Lsv Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Managed Volatility and Edgar Lomax 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 Edgar Lomax Value are associated (or correlated) with Lsv Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Managed Volatility has no effect on the direction of Edgar Lomax i.e., Edgar Lomax and Lsv Managed go up and down completely randomly.

Pair Corralation between Edgar Lomax and Lsv Managed

Assuming the 90 days horizon Edgar Lomax Value is expected to generate 0.99 times more return on investment than Lsv Managed. However, Edgar Lomax Value is 1.01 times less risky than Lsv Managed. It trades about 0.03 of its potential returns per unit of risk. Lsv Managed Volatility is currently generating about 0.02 per unit of risk. If you would invest  1,329  in Edgar Lomax Value on September 14, 2024 and sell it today you would earn a total of  158.00  from holding Edgar Lomax Value or generate 11.89% return on investment over 90 days.

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

Edgar Lomax Value  vs.  Lsv Managed Volatility

Edgar Lomax Value

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lsv Managed Volatility

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lsv Managed Volatility are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Lsv Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Edgar Lomax and Lsv Managed

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

The idea behind Edgar Lomax Value and Lsv Managed Volatility 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.