Correlation Between Fidelity Small and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Fidelity 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 Fidelity 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 Fidelity Small Cap and Lord Abbett Mid, you can compare the effects of market volatilities on Fidelity 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 Fidelity Small with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Lord Abbett.
Diversification Opportunities for Fidelity Small and Lord Abbett
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Lord is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Lord Abbett Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Mid and Fidelity 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 Fidelity 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 Mid has no effect on the direction of Fidelity Small i.e., Fidelity Small and Lord Abbett go up and down completely randomly.
Pair Corralation between Fidelity Small and Lord Abbett
Assuming the 90 days horizon Fidelity Small is expected to generate 1.88 times less return on investment than Lord Abbett. In addition to that, Fidelity Small is 1.55 times more volatile than Lord Abbett Mid. It trades about 0.11 of its total potential returns per unit of risk. Lord Abbett Mid is currently generating about 0.31 per unit of volatility. If you would invest 3,377 in Lord Abbett Mid on October 22, 2024 and sell it today you would earn a total of 125.00 from holding Lord Abbett Mid or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Lord Abbett Mid
Performance |
| Timeline |
| Fidelity Small Cap |
| Lord Abbett Mid |
Fidelity Small and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Lord Abbett
The main advantage of trading using opposite Fidelity Small and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity 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.| Fidelity Small vs. Fidelity Large Cap | Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Mid Cap | Fidelity Small vs. Fidelity Mid Cap |
| Lord Abbett vs. Multisector Bond Sma | Lord Abbett vs. Blrc Sgy Mnp | Lord Abbett vs. Bbh Intermediate Municipal | Lord Abbett vs. Maryland Tax Free Bond |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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