Correlation Between L Abbett and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both L Abbett and Ashmore Emerging 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 Ashmore Emerging 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 Ashmore Emerging Markets, you can compare the effects of market volatilities on L Abbett and Ashmore Emerging 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 Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Ashmore Emerging.
Diversification Opportunities for L Abbett and Ashmore Emerging
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between LGLSX and Ashmore is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets 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 Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of L Abbett i.e., L Abbett and Ashmore Emerging go up and down completely randomly.
Pair Corralation between L Abbett and Ashmore Emerging
Assuming the 90 days horizon L Abbett Growth is expected to generate 5.52 times more return on investment than Ashmore Emerging. However, L Abbett is 5.52 times more volatile than Ashmore Emerging Markets. It trades about 0.11 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.16 per unit of risk. If you would invest 2,920 in L Abbett Growth on September 2, 2024 and sell it today you would earn a total of 1,869 from holding L Abbett Growth or generate 64.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Abbett Growth vs. Ashmore Emerging Markets
Performance |
| Timeline |
| L Abbett Growth |
| Ashmore Emerging Markets |
L Abbett and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and Ashmore Emerging
The main advantage of trading using opposite L Abbett and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett position performs unexpectedly, Ashmore Emerging 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging'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 |
| Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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