Correlation Between L Abbett and Sit International
Can any of the company-specific risk be diversified away by investing in both L Abbett and Sit International 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 Sit International 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 Sit International Growth, you can compare the effects of market volatilities on L Abbett and Sit International 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 Sit International. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Sit International.
Diversification Opportunities for L Abbett and Sit International
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LGLSX and Sit is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Sit International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit International Growth 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 Sit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit International Growth has no effect on the direction of L Abbett i.e., L Abbett and Sit International go up and down completely randomly.
Pair Corralation between L Abbett and Sit International
Assuming the 90 days horizon L Abbett Growth is expected to generate 1.7 times more return on investment than Sit International. However, L Abbett is 1.7 times more volatile than Sit International Growth. It trades about 0.09 of its potential returns per unit of risk. Sit International Growth is currently generating about 0.04 per unit of risk. If you would invest 4,092 in L Abbett Growth on September 13, 2024 and sell it today you would earn a total of 708.00 from holding L Abbett Growth or generate 17.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Abbett Growth vs. Sit International Growth
Performance |
| Timeline |
| L Abbett Growth |
| Sit International Growth |
L Abbett and Sit International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and Sit International
The main advantage of trading using opposite L Abbett and Sit International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett position performs unexpectedly, Sit International 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 Sit International will offset losses from the drop in Sit International's long position.| L Abbett vs. The Gabelli Healthcare | L Abbett vs. Vanguard Health Care | L Abbett vs. Allianzgi Health Sciences | L Abbett vs. Lord Abbett Health |
| Sit International vs. Advent Claymore Convertible | Sit International vs. Putnam Convertible Incm Gwth | Sit International vs. Rationalpier 88 Convertible | Sit International vs. Lord Abbett Convertible |
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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