Correlation Between Kinetics Small and L Abbett
Can any of the company-specific risk be diversified away by investing in both Kinetics Small 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 Kinetics Small and L 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 L Abbett Growth, you can compare the effects of market volatilities on Kinetics Small 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 Kinetics Small with a short position of L Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and L Abbett.
Diversification Opportunities for Kinetics Small and L Abbett
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kinetics and LGLSX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small 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 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 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 Kinetics Small i.e., Kinetics Small and L Abbett go up and down completely randomly.
Pair Corralation between Kinetics Small and L Abbett
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.35 times more return on investment than L Abbett. However, Kinetics Small is 1.35 times more volatile than L Abbett Growth. It trades about 0.27 of its potential returns per unit of risk. L Abbett Growth is currently generating about 0.13 per unit of risk. If you would invest 11,762 in Kinetics Small Cap on September 1, 2024 and sell it today you would earn a total of 11,036 from holding Kinetics Small Cap or generate 93.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetics Small Cap vs. L Abbett Growth
Performance |
| Timeline |
| Kinetics Small Cap |
| L Abbett Growth |
Kinetics Small and L Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and L Abbett
The main advantage of trading using opposite Kinetics Small and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small 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.| Kinetics Small vs. Leggmason Partners Institutional | Kinetics Small vs. Scharf Global Opportunity | Kinetics Small vs. Qs Large Cap | Kinetics Small vs. Abr 7525 Volatility |
| L Abbett vs. Metropolitan West High | L Abbett vs. Franklin High Income | L Abbett vs. T Rowe Price | L Abbett vs. California High Yield Municipal |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |