Correlation Between Auer Growth and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Auer Growth 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 Auer Growth and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auer Growth Fund and Lord Abbett Bond, you can compare the effects of market volatilities on Auer Growth 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 Auer Growth with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Lord Abbett.
Diversification Opportunities for Auer Growth and Lord Abbett
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auer and Lord is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Lord Abbett Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Bond and Auer Growth 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 Auer Growth Fund 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 Bond has no effect on the direction of Auer Growth i.e., Auer Growth and Lord Abbett go up and down completely randomly.
Pair Corralation between Auer Growth and Lord Abbett
Assuming the 90 days horizon Auer Growth Fund is expected to generate 1.93 times more return on investment than Lord Abbett. However, Auer Growth is 1.93 times more volatile than Lord Abbett Bond. It trades about 0.06 of its potential returns per unit of risk. Lord Abbett Bond is currently generating about 0.04 per unit of risk. If you would invest 1,334 in Auer Growth Fund on September 3, 2024 and sell it today you would earn a total of 435.00 from holding Auer Growth Fund or generate 32.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. Lord Abbett Bond
Performance |
| Timeline |
| Auer Growth Fund |
| Lord Abbett Bond |
Auer Growth and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Lord Abbett
The main advantage of trading using opposite Auer Growth and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth 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.| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
| Lord Abbett vs. Franklin Natural Resources | Lord Abbett vs. Adams Natural Resources | Lord Abbett vs. Calvert Global Energy | Lord Abbett vs. Oil Gas Ultrasector |
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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