Correlation Between Mainstay Cbre and L Abbett

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

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

Diversification Opportunities for Mainstay Cbre and L Abbett

-0.36

Correlation Coefficient

Mainstay Cbre  L Abbett

Very good diversification

The 3 months correlation between Mainstay and LGLSX is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Cbre Global 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 Mainstay Cbre 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 Mainstay Cbre Global 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 Mainstay Cbre i.e., Mainstay Cbre and L Abbett go up and down completely randomly.

Pair Corralation between Mainstay Cbre and L Abbett

Assuming the 90 days horizon Mainstay Cbre Global is expected to under-perform the L Abbett. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mainstay Cbre Global is 1.95 times less risky than L Abbett. The mutual fund trades about -0.07 of its potential returns per unit of risk. The L Abbett Growth is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  4,300  in L Abbett Growth on October 23, 2024 and sell it today you would earn a total of  593.00  from holding L Abbett Growth or generate 13.79% return on investment over 90 days.

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

Mainstay Cbre Global  vs.  L Abbett Growth

Mainstay Cbre Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay Cbre Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Mainstay Cbre 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

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Growth are ranked lower than 12 (%) 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 Mainstay Cbre and L Abbett

The main advantage of trading using opposite Mainstay Cbre and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Cbre 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 Mainstay Cbre Global 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.