Correlation Between Lord Abbett and Touchstone Small
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Touchstone Small 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 Lord Abbett and Touchstone Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Growth and Touchstone Small Cap, you can compare the effects of market volatilities on Lord Abbett and Touchstone Small 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 Lord Abbett with a short position of Touchstone Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Touchstone Small.
Diversification Opportunities for Lord Abbett and Touchstone Small
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lord and Touchstone is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Growth and Touchstone Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Small Cap and Lord 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 Lord Abbett Growth are associated (or correlated) with Touchstone Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Small Cap has no effect on the direction of Lord Abbett i.e., Lord Abbett and Touchstone Small go up and down completely randomly.
Pair Corralation between Lord Abbett and Touchstone Small
Assuming the 90 days horizon Lord Abbett Growth is expected to generate 1.18 times more return on investment than Touchstone Small. However, Lord Abbett is 1.18 times more volatile than Touchstone Small Cap. It trades about 0.15 of its potential returns per unit of risk. Touchstone Small Cap is currently generating about 0.12 per unit of risk. If you would invest 2,125 in Lord Abbett Growth on September 1, 2024 and sell it today you would earn a total of 592.00 from holding Lord Abbett Growth or generate 27.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Lord Abbett Growth vs. Touchstone Small Cap
Performance |
| Timeline |
| Lord Abbett Growth |
| Touchstone Small Cap |
Lord Abbett and Touchstone Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Touchstone Small
The main advantage of trading using opposite Lord Abbett and Touchstone Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Touchstone Small 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 Touchstone Small will offset losses from the drop in Touchstone Small's long position.| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate Fund |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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