Correlation Between Keeley Small and L Abbett
Can any of the company-specific risk be diversified away by investing in both Keeley Small and L 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 Keeley Small and L Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keeley Small Mid Cap and L Abbett Fundamental, you can compare the effects of market volatilities on Keeley Small and L 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 Keeley Small with a short position of L Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keeley Small and L Abbett.
Diversification Opportunities for Keeley Small and L Abbett
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Keeley and LAVVX is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Keeley Small Mid Cap and L Abbett Fundamental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett Fundamental and Keeley 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 Keeley Small Mid Cap are associated (or correlated) with L Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Abbett Fundamental has no effect on the direction of Keeley Small i.e., Keeley Small and L Abbett go up and down completely randomly.
Pair Corralation between Keeley Small and L Abbett
Assuming the 90 days horizon Keeley Small Mid Cap is expected to generate 1.36 times more return on investment than L Abbett. However, Keeley Small is 1.36 times more volatile than L Abbett Fundamental. It trades about 0.12 of its potential returns per unit of risk. L Abbett Fundamental is currently generating about 0.14 per unit of risk. If you would invest 1,021 in Keeley Small Mid Cap on September 15, 2024 and sell it today you would earn a total of 69.00 from holding Keeley Small Mid Cap or generate 6.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.46% |
Values | Daily Returns |
Keeley Small Mid Cap vs. L Abbett Fundamental
Performance |
Timeline |
Keeley Small Mid |
L Abbett Fundamental |
Keeley Small and L Abbett Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Keeley Small and L Abbett
The main advantage of trading using opposite Keeley Small and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keeley Small position performs unexpectedly, L 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 L Abbett will offset losses from the drop in L Abbett's long position.Keeley Small vs. L Abbett Fundamental | Keeley Small vs. Small Cap Stock | Keeley Small vs. Ab Small Cap | Keeley Small vs. Rbb Fund |
L Abbett vs. Lord Abbett Trust | L Abbett vs. Lord Abbett Trust | L Abbett vs. Lord Abbett Focused | L Abbett vs. Floating Rate Fund |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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