Correlation Between Lord Abbett and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Growth Strategy 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 Growth Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Vertible and Growth Strategy Fund, you can compare the effects of market volatilities on Lord Abbett and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Growth Strategy.
Diversification Opportunities for Lord Abbett and Growth Strategy
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Growth is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Vertible and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Vertible are associated (or correlated) with Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Lord Abbett i.e., Lord Abbett and Growth Strategy go up and down completely randomly.
Pair Corralation between Lord Abbett and Growth Strategy
Assuming the 90 days horizon Lord Abbett is expected to generate 1.16 times less return on investment than Growth Strategy. But when comparing it to its historical volatility, Lord Abbett Vertible is 1.12 times less risky than Growth Strategy. It trades about 0.1 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,031 in Growth Strategy Fund on August 29, 2024 and sell it today you would earn a total of 279.00 from holding Growth Strategy Fund or generate 27.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Vertible vs. Growth Strategy Fund
Performance |
| Timeline |
| Lord Abbett Vertible |
| Growth Strategy |
Lord Abbett and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Growth Strategy
The main advantage of trading using opposite Lord Abbett and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy's long position.| Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate Fund | Lord Abbett vs. Floating Rate Fund | Lord Abbett vs. Lord Abbett Inv |
| Growth Strategy vs. International Developed Markets | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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