Correlation Between Voya Morgan and L Abbett

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Can any of the company-specific risk be diversified away by investing in both Voya Morgan 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 Voya Morgan and L Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Morgan Stanley and L Abbett Fundamental, you can compare the effects of market volatilities on Voya Morgan 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 Voya Morgan with a short position of L Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Morgan and L Abbett.

Diversification Opportunities for Voya Morgan and L Abbett

VoyaLAVVXDiversified AwayVoyaLAVVXDiversified Away100%
0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Voya and LAVVX is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Voya Morgan Stanley and L Abbett Fundamental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett Fundamental and Voya Morgan 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 Voya Morgan Stanley 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 Fundamental has no effect on the direction of Voya Morgan i.e., Voya Morgan and L Abbett go up and down completely randomly.

Pair Corralation between Voya Morgan and L Abbett

Assuming the 90 days horizon Voya Morgan Stanley is expected to under-perform the L Abbett. But the mutual fund apears to be less risky and, when comparing its historical volatility, Voya Morgan Stanley is 1.34 times less risky than L Abbett. The mutual fund trades about -0.03 of its potential returns per unit of risk. The L Abbett Fundamental is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,545  in L Abbett Fundamental on October 21, 2024 and sell it today you would earn a total of  60.00  from holding L Abbett Fundamental or generate 3.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Voya Morgan Stanley  vs.  L Abbett Fundamental

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -4-2024
JavaScript chart by amCharts 3.21.15VPRDX LAVVX
       Timeline  
Voya Morgan Stanley 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Voya Morgan Stanley has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Voya Morgan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan15.315.415.515.615.715.815.916
L Abbett Fundamental 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Fundamental are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, L Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1515.215.415.615.81616.2

Voya Morgan and L Abbett Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.92-0.66-0.4-0.14-0.01970.07090.280.540.81.06 0.20.40.60.81.01.2
JavaScript chart by amCharts 3.21.15VPRDX LAVVX
       Returns  

Pair Trading with Voya Morgan and L Abbett

The main advantage of trading using opposite Voya Morgan and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Morgan 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 Voya Morgan Stanley and L Abbett Fundamental 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.
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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