Correlation Between Kinetics Small and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Kinetics 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 Kinetics 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 Kinetics Small Cap and Lord Abbett Convertible, you can compare the effects of market volatilities on Kinetics 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 Kinetics Small with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Lord Abbett.
Diversification Opportunities for Kinetics Small and Lord Abbett
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinetics and Lord is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Lord Abbett Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Convertible and Kinetics 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 Kinetics 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 Convertible has no effect on the direction of Kinetics Small i.e., Kinetics Small and Lord Abbett go up and down completely randomly.
Pair Corralation between Kinetics Small and Lord Abbett
Assuming the 90 days horizon Kinetics Small Cap is expected to under-perform the Lord Abbett. In addition to that, Kinetics Small is 6.17 times more volatile than Lord Abbett Convertible. It trades about -0.09 of its total potential returns per unit of risk. Lord Abbett Convertible is currently generating about 0.23 per unit of volatility. If you would invest 1,443 in Lord Abbett Convertible on September 15, 2024 and sell it today you would earn a total of 39.00 from holding Lord Abbett Convertible or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. Lord Abbett Convertible
Performance |
| Timeline |
| Kinetics Small Cap |
| Lord Abbett Convertible |
Kinetics Small and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Lord Abbett
The main advantage of trading using opposite Kinetics Small and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics 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.| Kinetics Small vs. Touchstone Large Cap | Kinetics Small vs. Lord Abbett Affiliated | Kinetics Small vs. Large Cap Growth Profund | Kinetics Small vs. American Mutual Fund |
| Lord Abbett vs. Needham Small Cap | Lord Abbett vs. Smallcap Growth Fund | Lord Abbett vs. Kinetics Small Cap | Lord Abbett vs. Pace Smallmedium Value |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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