Correlation Between Alger Small and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Alger Small 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 Alger Small and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alger Small Cap and Lord Abbett Inflation, you can compare the effects of market volatilities on Alger Small 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 Alger Small with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alger Small and Lord Abbett.
Diversification Opportunities for Alger Small and Lord Abbett
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alger and Lord is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Alger Small Cap and Lord Abbett Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Inflation and Alger Small 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 Alger Small 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 Inflation has no effect on the direction of Alger Small i.e., Alger Small and Lord Abbett go up and down completely randomly.
Pair Corralation between Alger Small and Lord Abbett
Assuming the 90 days horizon Alger Small Cap is expected to generate 9.14 times more return on investment than Lord Abbett. However, Alger Small is 9.14 times more volatile than Lord Abbett Inflation. It trades about 0.07 of its potential returns per unit of risk. Lord Abbett Inflation is currently generating about 0.12 per unit of risk. If you would invest 1,840 in Alger Small Cap on September 1, 2024 and sell it today you would earn a total of 331.00 from holding Alger Small Cap or generate 17.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Alger Small Cap vs. Lord Abbett Inflation
Performance |
| Timeline |
| Alger Small Cap |
| Lord Abbett Inflation |
Alger Small and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alger Small and Lord Abbett
The main advantage of trading using opposite Alger Small and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alger Small 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.| Alger Small vs. Alger Midcap Growth | Alger Small vs. Alger Midcap Growth | Alger Small vs. Alger Mid Cap | Alger Small vs. Alger Small Cap |
| Lord Abbett vs. Technology Ultrasector Profund | Lord Abbett vs. Science Technology Fund | Lord Abbett vs. Biotechnology Fund Class | Lord Abbett vs. Towpath Technology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |