Correlation Between Avantis Large and Lord Abbett

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

Diversification Opportunities for Avantis Large and Lord Abbett

AvantisLordDiversified AwayAvantisLordDiversified Away100%
-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between Avantis and Lord is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Large Cap and Lord Abbett Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Floating and Avantis Large 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 Avantis Large Cap are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Floating has no effect on the direction of Avantis Large i.e., Avantis Large and Lord Abbett go up and down completely randomly.

Pair Corralation between Avantis Large and Lord Abbett

Assuming the 90 days horizon Avantis Large is expected to generate 1.08 times less return on investment than Lord Abbett. In addition to that, Avantis Large is 3.64 times more volatile than Lord Abbett Floating. It trades about 0.02 of its total potential returns per unit of risk. Lord Abbett Floating is currently generating about 0.08 per unit of volatility. If you would invest  814.00  in Lord Abbett Floating on November 21, 2024 and sell it today you would earn a total of  2.00  from holding Lord Abbett Floating or generate 0.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Avantis Large Cap  vs.  Lord Abbett Floating

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -5-4-3-2-1012
JavaScript chart by amCharts 3.21.15ALCEX LFROX
       Timeline  
Avantis Large Cap 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Avantis Large Cap are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Avantis Large 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 3.21.15DecJanFebJanFeb14.214.414.614.81515.2
Lord Abbett Floating 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Floating are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lord 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 3.21.15DecJanFebJanFeb8.028.048.068.088.18.128.148.168.18

Avantis Large and Lord Abbett Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.25-1.68-1.11-0.540.0095030.551.121.692.262.83 51015
JavaScript chart by amCharts 3.21.15ALCEX LFROX
       Returns  

Pair Trading with Avantis Large and Lord Abbett

The main advantage of trading using opposite Avantis Large and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Large position performs unexpectedly, Lord 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.
The idea behind Avantis Large Cap and Lord Abbett Floating 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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