Correlation Between Litman Gregory and AdvisorShares Restaurant
Can any of the company-specific risk be diversified away by investing in both Litman Gregory and AdvisorShares Restaurant 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 Litman Gregory and AdvisorShares Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litman Gregory Funds and AdvisorShares Restaurant ETF, you can compare the effects of market volatilities on Litman Gregory and AdvisorShares Restaurant 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 Litman Gregory with a short position of AdvisorShares Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litman Gregory and AdvisorShares Restaurant.
Diversification Opportunities for Litman Gregory and AdvisorShares Restaurant
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Litman and AdvisorShares is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Litman Gregory Funds and AdvisorShares Restaurant ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Restaurant and Litman Gregory 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 Litman Gregory Funds are associated (or correlated) with AdvisorShares Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Restaurant has no effect on the direction of Litman Gregory i.e., Litman Gregory and AdvisorShares Restaurant go up and down completely randomly.
Pair Corralation between Litman Gregory and AdvisorShares Restaurant
Given the investment horizon of 90 days Litman Gregory Funds is expected to generate 0.78 times more return on investment than AdvisorShares Restaurant. However, Litman Gregory Funds is 1.28 times less risky than AdvisorShares Restaurant. It trades about 0.0 of its potential returns per unit of risk. AdvisorShares Restaurant ETF is currently generating about -0.34 per unit of risk. If you would invest 1,096 in Litman Gregory Funds on August 18, 2025 and sell it today you would earn a total of 0.00 from holding Litman Gregory Funds or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litman Gregory Funds vs. AdvisorShares Restaurant ETF
Performance |
| Timeline |
| Litman Gregory Funds |
| AdvisorShares Restaurant |
Litman Gregory and AdvisorShares Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litman Gregory and AdvisorShares Restaurant
The main advantage of trading using opposite Litman Gregory and AdvisorShares Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litman Gregory position performs unexpectedly, AdvisorShares Restaurant 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 AdvisorShares Restaurant will offset losses from the drop in AdvisorShares Restaurant's long position.| Litman Gregory vs. Pacer Funds Trust | Litman Gregory vs. Matthews China Discovery | Litman Gregory vs. AdvisorShares Hotel ETF | Litman Gregory vs. Spinnaker ETF Series |
| AdvisorShares Restaurant vs. AdvisorShares Hotel ETF | AdvisorShares Restaurant vs. KraneShares Trust | AdvisorShares Restaurant vs. Amplify Weight Loss | AdvisorShares Restaurant vs. Proshares SP Global |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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