Correlation Between Lkcm Small and L Abbett
Can any of the company-specific risk be diversified away by investing in both Lkcm Small and L Abbett 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 Lkcm Small and L Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lkcm Small Cap and L Abbett Growth, you can compare the effects of market volatilities on Lkcm Small and L Abbett 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 Lkcm Small with a short position of L Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lkcm Small and L Abbett.
Diversification Opportunities for Lkcm Small and L Abbett
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lkcm and LGLSX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lkcm Small Cap and L Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett Growth and Lkcm Small 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 Lkcm Small Cap are associated (or correlated) with L Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Abbett Growth has no effect on the direction of Lkcm Small i.e., Lkcm Small and L Abbett go up and down completely randomly.
Pair Corralation between Lkcm Small and L Abbett
Assuming the 90 days horizon Lkcm Small Cap is expected to under-perform the L Abbett. But the mutual fund apears to be less risky and, when comparing its historical volatility, Lkcm Small Cap is 1.17 times less risky than L Abbett. The mutual fund trades about -0.16 of its potential returns per unit of risk. The L Abbett Growth is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,859 in L Abbett Growth on November 3, 2024 and sell it today you would earn a total of 90.00 from holding L Abbett Growth or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lkcm Small Cap vs. L Abbett Growth
Performance |
| Timeline |
| Lkcm Small Cap |
| L Abbett Growth |
Lkcm Small and L Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lkcm Small and L Abbett
The main advantage of trading using opposite Lkcm Small and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lkcm Small position performs unexpectedly, L Abbett 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 L Abbett will offset losses from the drop in L Abbett's long position.| Lkcm Small vs. Fulcrum Diversified Absolute | Lkcm Small vs. Jhancock Diversified Macro | Lkcm Small vs. Stone Ridge Diversified | Lkcm Small vs. Wilmington Diversified Income |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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