Correlation Between L Abbett and Perkins Select
Can any of the company-specific risk be diversified away by investing in both L Abbett and Perkins Select 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 Perkins Select 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 Perkins Select Value, you can compare the effects of market volatilities on L Abbett and Perkins Select 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 Perkins Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Perkins Select.
Diversification Opportunities for L Abbett and Perkins Select
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LGLSX and Perkins is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Perkins Select Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perkins Select Value 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 Perkins Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perkins Select Value has no effect on the direction of L Abbett i.e., L Abbett and Perkins Select go up and down completely randomly.
Pair Corralation between L Abbett and Perkins Select
Assuming the 90 days horizon L Abbett Growth is expected to generate 0.89 times more return on investment than Perkins Select. However, L Abbett Growth is 1.13 times less risky than Perkins Select. It trades about 0.41 of its potential returns per unit of risk. Perkins Select Value is currently generating about 0.26 per unit of risk. If you would invest 4,294 in L Abbett Growth on September 2, 2024 and sell it today you would earn a total of 495.00 from holding L Abbett Growth or generate 11.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Abbett Growth vs. Perkins Select Value
Performance |
| Timeline |
| L Abbett Growth |
| Perkins Select Value |
L Abbett and Perkins Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and Perkins Select
The main advantage of trading using opposite L Abbett and Perkins Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett position performs unexpectedly, Perkins Select 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 Perkins Select will offset losses from the drop in Perkins Select'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 |
| Perkins Select vs. Kinetics Small Cap | Perkins Select vs. Chase Growth Fund | Perkins Select vs. L Abbett Growth | Perkins Select vs. Legg Mason Partners |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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