Correlation Between Lsv Small and Catalyst/smh Total

Can any of the company-specific risk be diversified away by investing in both Lsv Small and Catalyst/smh Total 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 Catalyst/smh Total 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 Catalystsmh Total Return, you can compare the effects of market volatilities on Lsv Small and Catalyst/smh Total 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 Catalyst/smh Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsv Small and Catalyst/smh Total.

Diversification Opportunities for Lsv Small and Catalyst/smh Total

0.5

Correlation Coefficient

Lsv Small  Catalyst/smh Total

Very weak diversification

The 3 months correlation between Lsv and Catalyst/smh is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Small Cap and Catalystsmh Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh Total Return 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 Catalyst/smh Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh Total Return has no effect on the direction of Lsv Small i.e., Lsv Small and Catalyst/smh Total go up and down completely randomly.

Pair Corralation between Lsv Small and Catalyst/smh Total

Assuming the 90 days horizon Lsv Small is expected to generate 1.12 times less return on investment than Catalyst/smh Total. In addition to that, Lsv Small is 1.67 times more volatile than Catalystsmh Total Return. It trades about 0.16 of its total potential returns per unit of risk. Catalystsmh Total Return is currently generating about 0.29 per unit of volatility. If you would invest  435.00  in Catalystsmh Total Return on May 25, 2025 and sell it today you would earn a total of  54.00  from holding Catalystsmh Total Return or generate 12.41% return on investment over 90 days.

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

Lsv Small Cap  vs.  Catalystsmh Total Return

Lsv Small Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lsv Small Cap are ranked lower than 12 (%) 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.

Catalystsmh Total Return

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystsmh Total Return are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Catalyst/smh Total may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Lsv Small and Catalyst/smh Total

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

The idea behind Lsv Small Cap and Catalystsmh Total Return 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.