Correlation Between Locorr Strategic and Enhanced Large

Can any of the company-specific risk be diversified away by investing in both Locorr Strategic and Enhanced Large 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 Locorr Strategic and Enhanced Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Locorr Strategic Allocation and Enhanced Large Pany, you can compare the effects of market volatilities on Locorr Strategic and Enhanced Large 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 Locorr Strategic with a short position of Enhanced Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locorr Strategic and Enhanced Large.

Diversification Opportunities for Locorr Strategic and Enhanced Large

0.97

Correlation Coefficient

Locorr Strategic  Enhanced Large

Almost no diversification

The 3 months correlation between Locorr and Enhanced is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Locorr Strategic Allocation and Enhanced Large Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhanced Large Pany and Locorr Strategic 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 Locorr Strategic Allocation are associated (or correlated) with Enhanced Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhanced Large Pany has no effect on the direction of Locorr Strategic i.e., Locorr Strategic and Enhanced Large go up and down completely randomly.

Pair Corralation between Locorr Strategic and Enhanced Large

Assuming the 90 days horizon Locorr Strategic is expected to generate 1.74 times less return on investment than Enhanced Large. But when comparing it to its historical volatility, Locorr Strategic Allocation is 1.83 times less risky than Enhanced Large. It trades about 0.29 of its potential returns per unit of risk. Enhanced Large Pany is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,412  in Enhanced Large Pany on May 3, 2025 and sell it today you would earn a total of  184.00  from holding Enhanced Large Pany or generate 13.03% return on investment over 90 days.

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

Locorr Strategic Allocation  vs.  Enhanced Large Pany

Locorr Strategic All

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Locorr Strategic Allocation are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Locorr Strategic may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Enhanced Large Pany

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enhanced Large Pany are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Enhanced Large showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Locorr Strategic and Enhanced Large

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

The idea behind Locorr Strategic Allocation and Enhanced Large Pany 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.