Correlation Between Lebenthal Lisanti and Absolute Capital
Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Absolute Capital 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 Absolute Capital 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 Absolute Capital Defender, you can compare the effects of market volatilities on Lebenthal Lisanti and Absolute Capital 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 Absolute Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Absolute Capital.
Diversification Opportunities for Lebenthal Lisanti and Absolute Capital
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lebenthal and Absolute is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Absolute Capital Defender in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Capital Defender 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 Absolute Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Capital Defender has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Absolute Capital go up and down completely randomly.
Pair Corralation between Lebenthal Lisanti and Absolute Capital
Assuming the 90 days horizon Lebenthal Lisanti Small is expected to generate 2.95 times more return on investment than Absolute Capital. However, Lebenthal Lisanti is 2.95 times more volatile than Absolute Capital Defender. It trades about 0.16 of its potential returns per unit of risk. Absolute Capital Defender is currently generating about 0.21 per unit of risk. If you would invest 1,919 in Lebenthal Lisanti Small on June 5, 2025 and sell it today you would earn a total of 245.00 from holding Lebenthal Lisanti Small or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lebenthal Lisanti Small vs. Absolute Capital Defender
Performance |
| Timeline |
| Lebenthal Lisanti Small |
| Absolute Capital Defender |
Lebenthal Lisanti and Absolute Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lebenthal Lisanti and Absolute Capital
The main advantage of trading using opposite Lebenthal Lisanti and Absolute Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti position performs unexpectedly, Absolute Capital 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 Absolute Capital will offset losses from the drop in Absolute Capital's long position.| Lebenthal Lisanti vs. Ab Bond Inflation | Lebenthal Lisanti vs. Lord Abbett Inflation | Lebenthal Lisanti vs. Ab Bond Inflation | Lebenthal Lisanti vs. Short Duration Inflation |
| Absolute Capital vs. Absolute Capital Asset | Absolute Capital vs. Absolute Capital Asset | Absolute Capital vs. Absolute Capital Asset | Absolute Capital vs. Absolute Capital Defender |
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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