Correlation Between L Abbett and Investment Managers

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

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

Diversification Opportunities for L Abbett and Investment Managers

-0.37

Correlation Coefficient

L Abbett  Investment Managers

Very good diversification

The 3 months correlation between LGLSX and Investment is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Investment Managers Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Managers and L 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 L Abbett Growth are associated (or correlated) with Investment Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Managers has no effect on the direction of L Abbett i.e., L Abbett and Investment Managers go up and down completely randomly.

Pair Corralation between L Abbett and Investment Managers

Assuming the 90 days horizon L Abbett Growth is expected to under-perform the Investment Managers. In addition to that, L Abbett is 1.28 times more volatile than Investment Managers Series. It trades about -0.09 of its total potential returns per unit of risk. Investment Managers Series is currently generating about 0.24 per unit of volatility. If you would invest  933.00  in Investment Managers Series on December 23, 2024 and sell it today you would earn a total of  237.00  from holding Investment Managers Series or generate 25.4% return on investment over 90 days.

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

L Abbett Growth  vs.  Investment Managers Series

L Abbett Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days L Abbett Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Investment Managers

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Investment Managers Series are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Investment Managers showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with L Abbett and Investment Managers

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

The idea behind L Abbett Growth and Investment Managers Series 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.