Correlation Between Lord Abbett and International Growth
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and International Growth 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 International Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Govt and International Growth Fund, you can compare the effects of market volatilities on Lord Abbett and International Growth 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 International Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and International Growth.
Diversification Opportunities for Lord Abbett and International Growth
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lord and International is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Govt and International Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Growth 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 Govt are associated (or correlated) with International Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Growth has no effect on the direction of Lord Abbett i.e., Lord Abbett and International Growth go up and down completely randomly.
Pair Corralation between Lord Abbett and International Growth
Assuming the 90 days horizon Lord Abbett is expected to generate 2.67 times less return on investment than International Growth. But when comparing it to its historical volatility, Lord Abbett Govt is 4.29 times less risky than International Growth. It trades about 0.09 of its potential returns per unit of risk. International Growth Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,062 in International Growth Fund on September 4, 2024 and sell it today you would earn a total of 141.00 from holding International Growth Fund or generate 13.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Lord Abbett Govt vs. International Growth Fund
Performance |
| Timeline |
| Lord Abbett Govt |
| International Growth |
Lord Abbett and International Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and International Growth
The main advantage of trading using opposite Lord Abbett and International Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, International Growth 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 International Growth will offset losses from the drop in International Growth's long position.| Lord Abbett vs. Vanguard Total Stock | Lord Abbett vs. Vanguard 500 Index | Lord Abbett vs. Vanguard Total Stock | Lord Abbett vs. Vanguard Total Stock |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |