Correlation Between Lord Abbett and Kinetics Small
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Kinetics Small 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 Lord Abbett and Kinetics Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Affiliated and Kinetics Small Cap, you can compare the effects of market volatilities on Lord Abbett and Kinetics Small 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 Lord Abbett with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Kinetics Small.
Diversification Opportunities for Lord Abbett and Kinetics Small
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Kinetics is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Affiliated and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap and Lord Abbett 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 Lord Abbett Affiliated are associated (or correlated) with Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of Lord Abbett i.e., Lord Abbett and Kinetics Small go up and down completely randomly.
Pair Corralation between Lord Abbett and Kinetics Small
Assuming the 90 days horizon Lord Abbett Affiliated is expected to generate 0.29 times more return on investment than Kinetics Small. However, Lord Abbett Affiliated is 3.45 times less risky than Kinetics Small. It trades about -0.25 of its potential returns per unit of risk. Kinetics Small Cap is currently generating about -0.09 per unit of risk. If you would invest 2,039 in Lord Abbett Affiliated on September 15, 2024 and sell it today you would lose (104.00) from holding Lord Abbett Affiliated or give up 5.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Affiliated vs. Kinetics Small Cap
Performance |
| Timeline |
| Lord Abbett Affiliated |
| Kinetics Small Cap |
Lord Abbett and Kinetics Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Kinetics Small
The main advantage of trading using opposite Lord Abbett and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Kinetics Small 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 Kinetics Small will offset losses from the drop in Kinetics Small's long position.| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate Fund |
| 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 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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