Correlation Between Lebenthal Lisanti and Cavanal Hill

Can any of the company-specific risk be diversified away by investing in both Lebenthal Lisanti and Cavanal Hill 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 Cavanal Hill 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 Cavanal Hill Hedged, you can compare the effects of market volatilities on Lebenthal Lisanti and Cavanal Hill 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 Cavanal Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lebenthal Lisanti and Cavanal Hill.

Diversification Opportunities for Lebenthal Lisanti and Cavanal Hill

0.96

Correlation Coefficient

Lebenthal Lisanti  Cavanal Hill

Almost no diversification

The 3 months correlation between LEBENTHAL and Cavanal is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Cavanal Hill Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cavanal Hill Hedged 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 Cavanal Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cavanal Hill Hedged has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Cavanal Hill go up and down completely randomly.

Pair Corralation between Lebenthal Lisanti and Cavanal Hill

Assuming the 90 days horizon Lebenthal Lisanti Small is expected to generate 2.8 times more return on investment than Cavanal Hill. However, Lebenthal Lisanti is 2.8 times more volatile than Cavanal Hill Hedged. It trades about 0.16 of its potential returns per unit of risk. Cavanal Hill Hedged is currently generating about 0.17 per unit of risk. If you would invest  2,056  in Lebenthal Lisanti Small on July 17, 2025 and sell it today you would earn a total of  296.00  from holding Lebenthal Lisanti Small or generate 14.4% 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.  Cavanal Hill Hedged

Lebenthal Lisanti Small

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lebenthal Lisanti Small are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Lebenthal Lisanti showed solid returns over the last few months and may actually be approaching a breakup point.

Cavanal Hill Hedged

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cavanal Hill Hedged are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Cavanal Hill is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lebenthal Lisanti and Cavanal Hill

The main advantage of trading using opposite Lebenthal Lisanti and Cavanal Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti position performs unexpectedly, Cavanal Hill 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 Cavanal Hill will offset losses from the drop in Cavanal Hill's long position.

The idea behind Lebenthal Lisanti Small and Cavanal Hill Hedged pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .