Correlation Between Artisan Select and Lord Abbett

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

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

Diversification Opportunities for Artisan Select and Lord Abbett

0.54

Correlation Coefficient

Artisan Select  Lord Abbett

Very weak diversification

The 3 months correlation between Artisan and Lord is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Select Equity and Lord Abbett International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett International and Artisan Select 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 Artisan Select Equity are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett International has no effect on the direction of Artisan Select i.e., Artisan Select and Lord Abbett go up and down completely randomly.

Pair Corralation between Artisan Select and Lord Abbett

Assuming the 90 days horizon Artisan Select Equity is expected to generate 1.15 times more return on investment than Lord Abbett. However, Artisan Select is 1.15 times more volatile than Lord Abbett International. It trades about 0.3 of its potential returns per unit of risk. Lord Abbett International is currently generating about 0.32 per unit of risk. If you would invest  1,559  in Artisan Select Equity on October 27, 2024 and sell it today you would earn a total of  71.00  from holding Artisan Select Equity or generate 4.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Artisan Select Equity  vs.  Lord Abbett International

Artisan Select Equity

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Select Equity are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Artisan Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lord Abbett International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lord Abbett International 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 latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Artisan Select and Lord Abbett

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

The idea behind Artisan Select Equity and Lord Abbett International 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.