Correlation Between Lord Abbett and Hartford Small
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Hartford 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 Hartford Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Global and The Hartford Small, you can compare the effects of market volatilities on Lord Abbett and Hartford 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 Hartford Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Hartford Small.
Diversification Opportunities for Lord Abbett and Hartford Small
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lord and Hartford is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Global and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small 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 Global are associated (or correlated) with Hartford Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small has no effect on the direction of Lord Abbett i.e., Lord Abbett and Hartford Small go up and down completely randomly.
Pair Corralation between Lord Abbett and Hartford Small
Assuming the 90 days horizon Lord Abbett Global is expected to generate 0.69 times more return on investment than Hartford Small. However, Lord Abbett Global is 1.45 times less risky than Hartford Small. It trades about 0.11 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.08 per unit of risk. If you would invest 1,288 in Lord Abbett Global on September 12, 2024 and sell it today you would earn a total of 452.00 from holding Lord Abbett Global or generate 35.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Global vs. The Hartford Small
Performance |
| Timeline |
| Lord Abbett Global |
| Hartford Small |
Lord Abbett and Hartford Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Hartford Small
The main advantage of trading using opposite Lord Abbett and Hartford Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Hartford 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 Hartford Small will offset losses from the drop in Hartford Small's long position.| Lord Abbett vs. Pace Smallmedium Value | Lord Abbett vs. Mutual Of America | Lord Abbett vs. Lsv Small Cap | Lord Abbett vs. Queens Road Small |
| Hartford Small vs. Fidelity Small Cap | Hartford Small vs. Heartland Value Plus | Hartford Small vs. Amg River Road | Hartford Small vs. Lsv Small Cap |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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