Correlation Between Kensington Dynamic and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Kensington Dynamic 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 Kensington Dynamic and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kensington Dynamic Growth and Lord Abbett Emerging, you can compare the effects of market volatilities on Kensington Dynamic 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 Kensington Dynamic with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kensington Dynamic and Lord Abbett.
Diversification Opportunities for Kensington Dynamic and Lord Abbett
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kensington and Lord is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kensington Dynamic Growth and Lord Abbett Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Emerging and Kensington Dynamic 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 Kensington Dynamic Growth 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 Emerging has no effect on the direction of Kensington Dynamic i.e., Kensington Dynamic and Lord Abbett go up and down completely randomly.
Pair Corralation between Kensington Dynamic and Lord Abbett
Assuming the 90 days horizon Kensington Dynamic Growth is expected to generate 2.64 times more return on investment than Lord Abbett. However, Kensington Dynamic is 2.64 times more volatile than Lord Abbett Emerging. It trades about 0.06 of its potential returns per unit of risk. Lord Abbett Emerging is currently generating about 0.08 per unit of risk. If you would invest 1,086 in Kensington Dynamic Growth on September 3, 2024 and sell it today you would earn a total of 31.00 from holding Kensington Dynamic Growth or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kensington Dynamic Growth vs. Lord Abbett Emerging
Performance |
| Timeline |
| Kensington Dynamic Growth |
| Lord Abbett Emerging |
Kensington Dynamic and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kensington Dynamic and Lord Abbett
The main advantage of trading using opposite Kensington Dynamic and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kensington Dynamic 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.| Kensington Dynamic vs. Lord Abbett Emerging | Kensington Dynamic vs. Wells Fargo Funds | Kensington Dynamic vs. Elfun Government Money | Kensington Dynamic vs. Wilmington Funds |
| Lord Abbett vs. Fidelity New Markets | Lord Abbett vs. Fidelity New Markets | Lord Abbett vs. Fidelity New Markets | Lord Abbett vs. Fidelity New Markets |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |