Correlation Between Scharf Fund and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and Lord 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 Scharf Fund and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Fund Retail and Lord Abbett Growth, you can compare the effects of market volatilities on Scharf Fund and Lord 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 Scharf Fund with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Lord Abbett.
Diversification Opportunities for Scharf Fund and Lord Abbett
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scharf and Lord is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Lord Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Growth and Scharf Fund 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 Scharf Fund Retail are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Growth has no effect on the direction of Scharf Fund i.e., Scharf Fund and Lord Abbett go up and down completely randomly.
Pair Corralation between Scharf Fund and Lord Abbett
Assuming the 90 days horizon Scharf Fund Retail is expected to under-perform the Lord Abbett. But the mutual fund apears to be less risky and, when comparing its historical volatility, Scharf Fund Retail is 2.35 times less risky than Lord Abbett. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Lord Abbett Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,993 in Lord Abbett Growth on September 12, 2024 and sell it today you would earn a total of 99.00 from holding Lord Abbett Growth or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. Lord Abbett Growth
Performance |
| Timeline |
| Scharf Fund Retail |
| Lord Abbett Growth |
Scharf Fund and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Lord Abbett
The main advantage of trading using opposite Scharf Fund and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, Lord 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Scharf Fund vs. Gmo Resources | Scharf Fund vs. Icon Natural Resources | Scharf Fund vs. Fidelity Advisor Energy | Scharf Fund vs. Oil Gas Ultrasector |
| Lord Abbett vs. Pnc Emerging Markets | Lord Abbett vs. Eagle Mlp Strategy | Lord Abbett vs. Transamerica Emerging Markets | Lord Abbett vs. Artisan Emerging Markets |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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