Correlation Between Lebenthal Lisanti and Rational/pier
Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Rational/pier 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 Rational/pier 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 Rationalpier 88 Convertible, you can compare the effects of market volatilities on Lebenthal Lisanti and Rational/pier 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 Rational/pier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Rational/pier.
Diversification Opportunities for Lebenthal Lisanti and Rational/pier
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lebenthal and Rational/pier is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Rationalpier 88 Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rationalpier 88 Conv 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 Rational/pier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rationalpier 88 Conv has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Rational/pier go up and down completely randomly.
Pair Corralation between Lebenthal Lisanti and Rational/pier
Assuming the 90 days horizon Lebenthal Lisanti Small is expected to generate 2.85 times more return on investment than Rational/pier. However, Lebenthal Lisanti is 2.85 times more volatile than Rationalpier 88 Convertible. It trades about 0.3 of its potential returns per unit of risk. Rationalpier 88 Convertible is currently generating about 0.21 per unit of risk. If you would invest 1,677 in Lebenthal Lisanti Small on April 23, 2025 and sell it today you would earn a total of 379.00 from holding Lebenthal Lisanti Small or generate 22.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lebenthal Lisanti Small vs. Rationalpier 88 Convertible
Performance |
| Timeline |
| Lebenthal Lisanti Small |
| Rationalpier 88 Conv |
Lebenthal Lisanti and Rational/pier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lebenthal Lisanti and Rational/pier
The main advantage of trading using opposite Lebenthal Lisanti and Rational/pier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti position performs unexpectedly, Rational/pier 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 Rational/pier will offset losses from the drop in Rational/pier's long position.| Lebenthal Lisanti vs. Cref Inflation Linked Bond | Lebenthal Lisanti vs. Vy Blackrock Inflation | Lebenthal Lisanti vs. Great West Inflation Protected Securities | Lebenthal Lisanti vs. Lord Abbett Inflation |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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