Correlation Between Lord Abbett and Invesco Small

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

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

Diversification Opportunities for Lord Abbett and Invesco Small

0.0

Correlation Coefficient

Lord Abbett  Invesco Small

Pay attention - limited upside

The 3 months correlation between Lord and Invesco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Alpha and Invesco Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Small Cap and Lord Abbett 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 Lord Abbett Alpha are associated (or correlated) with Invesco Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Small Cap has no effect on the direction of Lord Abbett i.e., Lord Abbett and Invesco Small go up and down completely randomly.

Pair Corralation between Lord Abbett and Invesco Small

If you would invest  2,726  in Lord Abbett Alpha on October 1, 2024 and sell it today you would lose (7.00) from holding Lord Abbett Alpha or give up 0.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Lord Abbett Alpha  vs.  Invesco Small Cap

Lord Abbett Alpha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lord Abbett Alpha has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Lord Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Invesco Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Invesco Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lord Abbett and Invesco Small

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

The idea behind Lord Abbett Alpha and Invesco 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.