Correlation Between L Abbett and Old Westbury
Can any of the company-specific risk be diversified away by investing in both L Abbett and Old Westbury 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 Old Westbury 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 Old Westbury All, you can compare the effects of market volatilities on L Abbett and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Old Westbury.
Diversification Opportunities for L Abbett and Old Westbury
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LGLSX and Old is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Old Westbury All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury All 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury All has no effect on the direction of L Abbett i.e., L Abbett and Old Westbury go up and down completely randomly.
Pair Corralation between L Abbett and Old Westbury
Assuming the 90 days horizon L Abbett Growth is expected to generate 1.55 times more return on investment than Old Westbury. However, L Abbett is 1.55 times more volatile than Old Westbury All. It trades about 0.26 of its potential returns per unit of risk. Old Westbury All is currently generating about 0.21 per unit of risk. If you would invest 4,381 in L Abbett Growth on August 31, 2024 and sell it today you would earn a total of 363.00 from holding L Abbett Growth or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Abbett Growth vs. Old Westbury All
Performance |
| Timeline |
| L Abbett Growth |
| Old Westbury All |
L Abbett and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and Old Westbury
The main advantage of trading using opposite L Abbett and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| L Abbett vs. Europacific Growth Fund | L Abbett vs. Washington Mutual Investors | L Abbett vs. Capital World Growth | L Abbett vs. HUMANA INC |
| Old Westbury vs. Western Asset High | Old Westbury vs. Artisan High Income | Old Westbury vs. Msift High Yield | Old Westbury vs. American Century High |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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