Correlation Between Templeton Growth and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Templeton 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 Templeton 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 Templeton Growth Fund and Lord Abbett Small, you can compare the effects of market volatilities on Templeton 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 Templeton Growth with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Lord Abbett.
Diversification Opportunities for Templeton Growth and Lord Abbett
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Templeton and Lord is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Lord Abbett Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Small and Templeton 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 Templeton 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 Small has no effect on the direction of Templeton Growth i.e., Templeton Growth and Lord Abbett go up and down completely randomly.
Pair Corralation between Templeton Growth and Lord Abbett
Assuming the 90 days horizon Templeton Growth Fund is expected to generate 0.73 times more return on investment than Lord Abbett. However, Templeton Growth Fund is 1.38 times less risky than Lord Abbett. It trades about 0.21 of its potential returns per unit of risk. Lord Abbett Small is currently generating about 0.13 per unit of risk. If you would invest 2,662 in Templeton Growth Fund on October 24, 2024 and sell it today you would earn a total of 72.00 from holding Templeton Growth Fund or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Templeton Growth Fund vs. Lord Abbett Small
Performance |
| Timeline |
| Templeton Growth |
| Lord Abbett Small |
Templeton Growth and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Growth and Lord Abbett
The main advantage of trading using opposite Templeton Growth and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton 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.| Templeton Growth vs. Touchstone Large Cap | Templeton Growth vs. Issachar Fund Class | Templeton Growth vs. Qs Large Cap | Templeton Growth vs. Rbc Global Equity |
| Lord Abbett vs. Needham Aggressive Growth | Lord Abbett vs. Qs Small Capitalization | Lord Abbett vs. Tfa Alphagen Growth | Lord Abbett vs. Sp Smallcap 600 |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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