Correlation Between Lord Abbett and Hunter Small
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Hunter 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 Hunter Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Growth and Hunter Small Cap, you can compare the effects of market volatilities on Lord Abbett and Hunter 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 Hunter Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Hunter Small.
Diversification Opportunities for Lord Abbett and Hunter Small
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Hunter is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Growth and Hunter Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunter 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 Growth are associated (or correlated) with Hunter Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunter Small Cap has no effect on the direction of Lord Abbett i.e., Lord Abbett and Hunter Small go up and down completely randomly.
Pair Corralation between Lord Abbett and Hunter Small
Assuming the 90 days horizon Lord Abbett Growth is expected to generate 1.81 times more return on investment than Hunter Small. However, Lord Abbett is 1.81 times more volatile than Hunter Small Cap. It trades about 0.06 of its potential returns per unit of risk. Hunter Small Cap is currently generating about -0.53 per unit of risk. If you would invest 4,993 in Lord Abbett Growth on September 24, 2024 and sell it today you would earn a total of 81.00 from holding Lord Abbett Growth or generate 1.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Lord Abbett Growth vs. Hunter Small Cap
Performance |
Timeline |
Lord Abbett Growth |
Hunter Small Cap |
Lord Abbett and Hunter Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lord Abbett and Hunter Small
The main advantage of trading using opposite Lord Abbett and Hunter Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Hunter 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 Hunter Small will offset losses from the drop in Hunter Small's long position.Lord Abbett vs. Goldman Sachs Clean | Lord Abbett vs. Oppenheimer Gold Special | Lord Abbett vs. Fidelity Advisor Gold | Lord Abbett vs. Short Precious Metals |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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