Correlation Between Dana Large and L Abbett
Can any of the company-specific risk be diversified away by investing in both Dana Large 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 Dana Large and L Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and L Abbett Growth, you can compare the effects of market volatilities on Dana Large 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 Dana Large with a short position of L Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and L Abbett.
Diversification Opportunities for Dana Large and L Abbett
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dana and LGLVX is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap 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 Dana 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 Dana Large Cap 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 Dana Large i.e., Dana Large and L Abbett go up and down completely randomly.
Pair Corralation between Dana Large and L Abbett
Assuming the 90 days horizon Dana Large is expected to generate 2.03 times less return on investment than L Abbett. But when comparing it to its historical volatility, Dana Large Cap is 1.57 times less risky than L Abbett. It trades about 0.34 of its potential returns per unit of risk. L Abbett Growth is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 4,539 in L Abbett Growth on September 3, 2024 and sell it today you would earn a total of 541.00 from holding L Abbett Growth or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Large Cap vs. L Abbett Growth
Performance |
| Timeline |
| Dana Large Cap |
| L Abbett Growth |
Dana Large and L Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and L Abbett
The main advantage of trading using opposite Dana Large and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large 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.| Dana Large vs. Msift High Yield | Dana Large vs. Gmo High Yield | Dana Large vs. Guggenheim High Yield | Dana Large vs. Pgim High Yield |
| L Abbett vs. Mutual Of America | L Abbett vs. Queens Road Small | L Abbett vs. Vanguard Small Cap Value | L Abbett vs. American Century Etf |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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