Correlation Between Lsv Value and Spectrum International
Can any of the company-specific risk be diversified away by investing in both Lsv Value and Spectrum International 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 Lsv Value and Spectrum International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsv Value Equity and Spectrum International Fund, you can compare the effects of market volatilities on Lsv Value and Spectrum International 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 Lsv Value with a short position of Spectrum International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsv Value and Spectrum International.
Diversification Opportunities for Lsv Value and Spectrum International
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lsv and Spectrum is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Value Equity and Spectrum International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum International and Lsv Value 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 Lsv Value Equity are associated (or correlated) with Spectrum International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum International has no effect on the direction of Lsv Value i.e., Lsv Value and Spectrum International go up and down completely randomly.
Pair Corralation between Lsv Value and Spectrum International
Assuming the 90 days horizon Lsv Value is expected to generate 1.08 times less return on investment than Spectrum International. In addition to that, Lsv Value is 1.04 times more volatile than Spectrum International Fund. It trades about 0.03 of its total potential returns per unit of risk. Spectrum International Fund is currently generating about 0.03 per unit of volatility. If you would invest 1,720 in Spectrum International Fund on August 25, 2025 and sell it today you would earn a total of 23.00 from holding Spectrum International Fund or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lsv Value Equity vs. Spectrum International Fund
Performance |
| Timeline |
| Lsv Value Equity |
| Spectrum International |
Lsv Value and Spectrum International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsv Value and Spectrum International
The main advantage of trading using opposite Lsv Value and Spectrum International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsv Value position performs unexpectedly, Spectrum International 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 Spectrum International will offset losses from the drop in Spectrum International's long position.| Lsv Value vs. Spectrum International Fund | Lsv Value vs. T Rowe Price | Lsv Value vs. Virtus Dividend Interest | Lsv Value vs. Goldman Sachs Equity |
| Spectrum International vs. Lsv Value Equity | Spectrum International vs. Virtus Dividend Interest | Spectrum International vs. T Rowe Price | Spectrum International vs. T Rowe Price |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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