Correlation Between L Abbett and California Bond
Can any of the company-specific risk be diversified away by investing in both L Abbett and California Bond 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 California Bond 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 California Bond Fund, you can compare the effects of market volatilities on L Abbett and California Bond 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 California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and California Bond.
Diversification Opportunities for L Abbett and California Bond
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between LGLSX and California is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Bond 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 California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of L Abbett i.e., L Abbett and California Bond go up and down completely randomly.
Pair Corralation between L Abbett and California Bond
Assuming the 90 days horizon L Abbett Growth is expected to generate 10.96 times more return on investment than California Bond. However, L Abbett is 10.96 times more volatile than California Bond Fund. It trades about 0.14 of its potential returns per unit of risk. California Bond Fund is currently generating about 0.58 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Abbett Growth vs. California Bond Fund
Performance |
| Timeline |
| L Abbett Growth |
| California Bond |
L Abbett and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and California Bond
The main advantage of trading using opposite L Abbett and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond'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 |
| California Bond vs. Vanguard California Long Term | California Bond vs. Vanguard California Long Term | California Bond vs. SCOR PK | California Bond vs. Morningstar Unconstrained Allocation |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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