Correlation Between L Abbett and Jpmorgan Intrepid

Can any of the company-specific risk be diversified away by investing in both L Abbett and Jpmorgan Intrepid 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 Jpmorgan Intrepid 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 Jpmorgan Intrepid Mid, you can compare the effects of market volatilities on L Abbett and Jpmorgan Intrepid 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 Jpmorgan Intrepid. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Jpmorgan Intrepid.

Diversification Opportunities for L Abbett and Jpmorgan Intrepid

0.21

Correlation Coefficient

L Abbett  Jpmorgan Intrepid

Modest diversification

The 3 months correlation between LGLSX and Jpmorgan is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Jpmorgan Intrepid Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Intrepid Mid 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 Jpmorgan Intrepid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Intrepid Mid has no effect on the direction of L Abbett i.e., L Abbett and Jpmorgan Intrepid go up and down completely randomly.

Pair Corralation between L Abbett and Jpmorgan Intrepid

Assuming the 90 days horizon L Abbett Growth is expected to generate 1.62 times more return on investment than Jpmorgan Intrepid. However, L Abbett is 1.62 times more volatile than Jpmorgan Intrepid Mid. It trades about 0.12 of its potential returns per unit of risk. Jpmorgan Intrepid Mid is currently generating about -0.15 per unit of risk. If you would invest  4,751  in L Abbett Growth on October 25, 2024 and sell it today you would earn a total of  306.00  from holding L Abbett Growth or generate 6.44% return on investment over 90 days.

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

L Abbett Growth  vs.  Jpmorgan Intrepid Mid

L Abbett Growth

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Growth are ranked lower than 14 (%) 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.

Jpmorgan Intrepid Mid

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Intrepid Mid are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Intrepid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with L Abbett and Jpmorgan Intrepid

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

The idea behind L Abbett Growth and Jpmorgan Intrepid Mid 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.