Correlation Between Lord Abbett and Growth Portfolio
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Growth Portfolio 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 Growth Portfolio 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 Growth Portfolio Class, you can compare the effects of market volatilities on Lord Abbett and Growth Portfolio 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 Growth Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Growth Portfolio.
Diversification Opportunities for Lord Abbett and Growth Portfolio
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lord and Growth is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Health and Growth Portfolio Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Portfolio Class 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 Growth Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Portfolio Class has no effect on the direction of Lord Abbett i.e., Lord Abbett and Growth Portfolio go up and down completely randomly.
Pair Corralation between Lord Abbett and Growth Portfolio
Assuming the 90 days horizon Lord Abbett is expected to generate 2.53 times less return on investment than Growth Portfolio. But when comparing it to its historical volatility, Lord Abbett Health is 1.63 times less risky than Growth Portfolio. It trades about 0.1 of its potential returns per unit of risk. Growth Portfolio Class is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,303 in Growth Portfolio Class on September 1, 2024 and sell it today you would earn a total of 2,075 from holding Growth Portfolio Class or generate 90.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Lord Abbett Health vs. Growth Portfolio Class
Performance |
| Timeline |
| Lord Abbett Health |
| Growth Portfolio Class |
Lord Abbett and Growth Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Growth Portfolio
The main advantage of trading using opposite Lord Abbett and Growth Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Growth Portfolio 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 Growth Portfolio will offset losses from the drop in Growth Portfolio's long position.| Lord Abbett vs. Enhanced Large Pany | Lord Abbett vs. Aqr Large Cap | Lord Abbett vs. T Rowe Price | Lord Abbett vs. Jhancock Disciplined Value |
| Growth Portfolio vs. Emerging Markets Equity | Growth Portfolio vs. Global Fixed Income | Growth Portfolio vs. Global Fixed Income | Growth Portfolio vs. Global Fixed Income |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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