Correlation Between L Abbett and Mfs Georgia
Can any of the company-specific risk be diversified away by investing in both L Abbett and Mfs Georgia 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 Mfs Georgia 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 Mfs Georgia Municipal, you can compare the effects of market volatilities on L Abbett and Mfs Georgia 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 Mfs Georgia. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Mfs Georgia.
Diversification Opportunities for L Abbett and Mfs Georgia
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between LGLSX and Mfs is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Mfs Georgia Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Georgia Municipal 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 Mfs Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Georgia Municipal has no effect on the direction of L Abbett i.e., L Abbett and Mfs Georgia go up and down completely randomly.
Pair Corralation between L Abbett and Mfs Georgia
Assuming the 90 days horizon L Abbett Growth is expected to generate 5.12 times more return on investment than Mfs Georgia. However, L Abbett is 5.12 times more volatile than Mfs Georgia Municipal. It trades about -0.06 of its potential returns per unit of risk. Mfs Georgia Municipal is currently generating about -0.31 per unit of risk. If you would invest 4,982 in L Abbett Growth on October 7, 2024 and sell it today you would lose (107.00) from holding L Abbett Growth or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Abbett Growth vs. Mfs Georgia Municipal
Performance |
| Timeline |
| L Abbett Growth |
| Mfs Georgia Municipal |
L Abbett and Mfs Georgia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and Mfs Georgia
The main advantage of trading using opposite L Abbett and Mfs Georgia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett position performs unexpectedly, Mfs Georgia 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 Mfs Georgia will offset losses from the drop in Mfs Georgia's long position.| L Abbett vs. Asg Managed Futures | L Abbett vs. Lord Abbett Inflation | L Abbett vs. Arrow Managed Futures | L Abbett vs. Massmutual Premier Inflation Protected |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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