Correlation Between Lord Abbett and Walden Midcap
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Walden Midcap 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 Walden Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Short and Walden Midcap Fund, you can compare the effects of market volatilities on Lord Abbett and Walden Midcap 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 Walden Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Walden Midcap.
Diversification Opportunities for Lord Abbett and Walden Midcap
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lord and Walden is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Walden Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walden Midcap 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 Short are associated (or correlated) with Walden Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walden Midcap has no effect on the direction of Lord Abbett i.e., Lord Abbett and Walden Midcap go up and down completely randomly.
Pair Corralation between Lord Abbett and Walden Midcap
Assuming the 90 days horizon Lord Abbett is expected to generate 1.57 times less return on investment than Walden Midcap. But when comparing it to its historical volatility, Lord Abbett Short is 4.54 times less risky than Walden Midcap. It trades about 0.11 of its potential returns per unit of risk. Walden Midcap Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,947 in Walden Midcap Fund on December 12, 2024 and sell it today you would earn a total of 298.00 from holding Walden Midcap Fund or generate 15.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Short vs. Walden Midcap Fund
Performance |
| Timeline |
| Lord Abbett Short |
| Walden Midcap |
Lord Abbett and Walden Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Walden Midcap
The main advantage of trading using opposite Lord Abbett and Walden Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Walden Midcap 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 Walden Midcap will offset losses from the drop in Walden Midcap's long position.| Lord Abbett vs. Kinetics Small Cap | ||
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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