Correlation Between L Abbett and Strategic Enhanced
Can any of the company-specific risk be diversified away by investing in both L Abbett and Strategic Enhanced 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 L Abbett and Strategic Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L Abbett Growth and Strategic Enhanced Yield, you can compare the effects of market volatilities on L Abbett and Strategic Enhanced 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 L Abbett with a short position of Strategic Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Strategic Enhanced.
Diversification Opportunities for L Abbett and Strategic Enhanced
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LGLSX and Strategic is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Strategic Enhanced Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Enhanced Yield and L 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 L Abbett Growth are associated (or correlated) with Strategic Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Enhanced Yield has no effect on the direction of L Abbett i.e., L Abbett and Strategic Enhanced go up and down completely randomly.
Pair Corralation between L Abbett and Strategic Enhanced
Assuming the 90 days horizon L Abbett Growth is expected to generate 3.8 times more return on investment than Strategic Enhanced. However, L Abbett is 3.8 times more volatile than Strategic Enhanced Yield. It trades about 0.44 of its potential returns per unit of risk. Strategic Enhanced Yield is currently generating about 0.13 per unit of risk. If you would invest 4,279 in L Abbett Growth on September 4, 2024 and sell it today you would earn a total of 522.00 from holding L Abbett Growth or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Abbett Growth vs. Strategic Enhanced Yield
Performance |
| Timeline |
| L Abbett Growth |
| Strategic Enhanced Yield |
L Abbett and Strategic Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and Strategic Enhanced
The main advantage of trading using opposite L Abbett and Strategic Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett position performs unexpectedly, Strategic Enhanced 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 Strategic Enhanced will offset losses from the drop in Strategic Enhanced's long position.| L Abbett vs. Lord Abbett Trust | L Abbett vs. Lord Abbett Trust | L Abbett vs. Lord Abbett Focused | L Abbett vs. Floating Rate Fund |
| Strategic Enhanced vs. Bond Fund Investor | Strategic Enhanced vs. Strategic Enhanced Yield | Strategic Enhanced vs. Cavanal Hill Hedged | Strategic Enhanced vs. Limited Duration 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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