Correlation Between Lsv Small and Iaadx
Can any of the company-specific risk be diversified away by investing in both Lsv Small and Iaadx 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 Small and Iaadx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsv Small Cap and Iaadx, you can compare the effects of market volatilities on Lsv Small and Iaadx 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 Small with a short position of Iaadx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsv Small and Iaadx.
Diversification Opportunities for Lsv Small and Iaadx
Very good diversification
The 3 months correlation between Lsv and Iaadx is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Small Cap and Iaadx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iaadx and Lsv Small 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 Small Cap are associated (or correlated) with Iaadx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iaadx has no effect on the direction of Lsv Small i.e., Lsv Small and Iaadx go up and down completely randomly.
Pair Corralation between Lsv Small and Iaadx
Assuming the 90 days horizon Lsv Small is expected to generate 3.4 times less return on investment than Iaadx. In addition to that, Lsv Small is 3.95 times more volatile than Iaadx. It trades about 0.02 of its total potential returns per unit of risk. Iaadx is currently generating about 0.24 per unit of volatility. If you would invest 940.00 in Iaadx on August 17, 2025 and sell it today you would earn a total of 34.00 from holding Iaadx or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Lsv Small Cap vs. Iaadx
Performance |
| Timeline |
| Lsv Small Cap |
| Iaadx |
Lsv Small and Iaadx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsv Small and Iaadx
The main advantage of trading using opposite Lsv Small and Iaadx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsv Small position performs unexpectedly, Iaadx 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 Iaadx will offset losses from the drop in Iaadx's long position.| Lsv Small vs. Northern Small Cap | Lsv Small vs. Guidemark Large Cap | Lsv Small vs. American Beacon International | Lsv Small vs. Rmb Mendon Financial |
| Iaadx vs. Transamerica Emerging Markets | Iaadx vs. Transamerica Emerging Markets | Iaadx vs. Transamerica Emerging Markets | Iaadx vs. Transamerica Capital Growth |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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