Correlation Between L Abbett and Income Fund
Can any of the company-specific risk be diversified away by investing in both L Abbett and Income Fund 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 Income Fund 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 Income Fund Income, you can compare the effects of market volatilities on L Abbett and Income Fund 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 Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Income Fund.
Diversification Opportunities for L Abbett and Income Fund
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LGLSX and Income is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Income Fund Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund Income 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 Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund Income has no effect on the direction of L Abbett i.e., L Abbett and Income Fund go up and down completely randomly.
Pair Corralation between L Abbett and Income Fund
Assuming the 90 days horizon L Abbett Growth is expected to generate 3.65 times more return on investment than Income Fund. However, L Abbett is 3.65 times more volatile than Income Fund Income. It trades about 0.14 of its potential returns per unit of risk. Income Fund Income is currently generating about 0.07 per unit of risk. If you would invest 4,707 in L Abbett Growth on September 12, 2024 and sell it today you would earn a total of 157.00 from holding L Abbett Growth or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
L Abbett Growth vs. Income Fund Income
Performance |
| Timeline |
| L Abbett Growth |
| Income Fund Income |
L Abbett and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and Income Fund
The main advantage of trading using opposite L Abbett and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund's long position.| L Abbett vs. Dreyfus Technology Growth | L Abbett vs. Pgim Jennison Technology | L Abbett vs. Fidelity Advisor Technology | L Abbett vs. Global Technology Portfolio |
| Income Fund vs. L Abbett Growth | Income Fund vs. Chase Growth Fund | Income Fund vs. T Rowe Price | Income Fund vs. Champlain Mid Cap |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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