Correlation Between Lord Abbett and Kinetics Paradigm
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Kinetics Paradigm 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 Kinetics Paradigm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Health and Kinetics Paradigm Fund, you can compare the effects of market volatilities on Lord Abbett and Kinetics Paradigm 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 Kinetics Paradigm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Kinetics Paradigm.
Diversification Opportunities for Lord Abbett and Kinetics Paradigm
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lord and Kinetics is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Health and Kinetics Paradigm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Paradigm 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 Health are associated (or correlated) with Kinetics Paradigm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Paradigm has no effect on the direction of Lord Abbett i.e., Lord Abbett and Kinetics Paradigm go up and down completely randomly.
Pair Corralation between Lord Abbett and Kinetics Paradigm
Assuming the 90 days horizon Lord Abbett is expected to generate 35.13 times less return on investment than Kinetics Paradigm. But when comparing it to its historical volatility, Lord Abbett Health is 2.34 times less risky than Kinetics Paradigm. It trades about 0.03 of its potential returns per unit of risk. Kinetics Paradigm Fund is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 10,514 in Kinetics Paradigm Fund on September 3, 2024 and sell it today you would earn a total of 8,046 from holding Kinetics Paradigm Fund or generate 76.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Health vs. Kinetics Paradigm Fund
Performance |
| Timeline |
| Lord Abbett Health |
| Kinetics Paradigm |
Lord Abbett and Kinetics Paradigm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Kinetics Paradigm
The main advantage of trading using opposite Lord Abbett and Kinetics Paradigm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Kinetics Paradigm 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 Kinetics Paradigm will offset losses from the drop in Kinetics Paradigm's long position.| Lord Abbett vs. Fidelity Real Estate | Lord Abbett vs. Us Real Estate | Lord Abbett vs. Vanguard Reit Index | Lord Abbett vs. Commonwealth Real Estate |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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