Correlation Between Global Technology and Lsv Small

Can any of the company-specific risk be diversified away by investing in both Global Technology and Lsv Small 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 Global Technology and Lsv Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Technology Portfolio and Lsv Small Cap, you can compare the effects of market volatilities on Global Technology and Lsv Small 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 Global Technology with a short position of Lsv Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Technology and Lsv Small.

Diversification Opportunities for Global Technology and Lsv Small

0.86

Correlation Coefficient

Global Technology  Lsv Small

Very poor diversification

The 3 months correlation between Global and Lsv is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Global Technology Portfolio and Lsv Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Small Cap and Global Technology 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 Global Technology Portfolio are associated (or correlated) with Lsv Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Small Cap has no effect on the direction of Global Technology i.e., Global Technology and Lsv Small go up and down completely randomly.

Pair Corralation between Global Technology and Lsv Small

Assuming the 90 days horizon Global Technology Portfolio is expected to generate 0.86 times more return on investment than Lsv Small. However, Global Technology Portfolio is 1.17 times less risky than Lsv Small. It trades about 0.34 of its potential returns per unit of risk. Lsv Small Cap is currently generating about 0.11 per unit of risk. If you would invest  1,852  in Global Technology Portfolio on May 7, 2025 and sell it today you would earn a total of  414.00  from holding Global Technology Portfolio or generate 22.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Global Technology Portfolio  vs.  Lsv Small Cap

Global Technology

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Global Technology Portfolio are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Global Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Lsv Small Cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Lsv Small Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lsv Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Global Technology and Lsv Small

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

The idea behind Global Technology Portfolio and Lsv Small Cap 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.