Correlation Between Lord Abbett and L Abbett

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

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

Diversification Opportunities for Lord Abbett and L Abbett

0.87

Correlation Coefficient

Lord Abbett  L Abbett

Very poor diversification

The 3 months correlation between Lord and LGLUX is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Floating and L Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett Growth 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 Floating 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 Growth has no effect on the direction of Lord Abbett i.e., Lord Abbett and L Abbett go up and down completely randomly.

Pair Corralation between Lord Abbett and L Abbett

Assuming the 90 days horizon Lord Abbett is expected to generate 24.32 times less return on investment than L Abbett. But when comparing it to its historical volatility, Lord Abbett Floating is 12.3 times less risky than L Abbett. It trades about 0.1 of its potential returns per unit of risk. L Abbett Growth is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,521  in L Abbett Growth on September 23, 2024 and sell it today you would earn a total of  555.00  from holding L Abbett Growth or generate 12.28% return on investment over 90 days.

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

Lord Abbett Floating  vs.  L Abbett Growth

Lord Abbett Floating

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Floating are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. 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.

L Abbett Growth

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Growth are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, L Abbett showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lord Abbett and L Abbett

The main advantage of trading using opposite Lord Abbett and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett 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.

The idea behind Lord Abbett Floating and L Abbett Growth 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.