Correlation Between Lord Abbett and Growth Allocation
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Growth Allocation 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 Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Small and Growth Allocation Fund, you can compare the effects of market volatilities on Lord Abbett and Growth Allocation 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 Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Growth Allocation.
Diversification Opportunities for Lord Abbett and Growth Allocation
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Growth is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and Growth Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Allocation 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 Small are associated (or correlated) with Growth Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Allocation has no effect on the direction of Lord Abbett i.e., Lord Abbett and Growth Allocation go up and down completely randomly.
Pair Corralation between Lord Abbett and Growth Allocation
Assuming the 90 days horizon Lord Abbett Small is expected to generate 3.39 times more return on investment than Growth Allocation. However, Lord Abbett is 3.39 times more volatile than Growth Allocation Fund. It trades about 0.3 of its potential returns per unit of risk. Growth Allocation Fund is currently generating about 0.24 per unit of risk. If you would invest 2,255 in Lord Abbett Small on September 3, 2024 and sell it today you would earn a total of 228.00 from holding Lord Abbett Small or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Small vs. Growth Allocation Fund
Performance |
| Timeline |
| Lord Abbett Small |
| Growth Allocation |
Lord Abbett and Growth Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Growth Allocation
The main advantage of trading using opposite Lord Abbett and Growth Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Growth Allocation 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 Allocation will offset losses from the drop in Growth Allocation's long position.| Lord Abbett vs. Vanguard Small Cap Value | Lord Abbett vs. Vanguard Small Cap Value | Lord Abbett vs. Us Small Cap | Lord Abbett vs. Us Targeted Value |
| Growth Allocation vs. Fidelity Sai Convertible | Growth Allocation vs. Rationalpier 88 Convertible | Growth Allocation vs. Advent Claymore Convertible | Growth Allocation vs. Virtus Convertible |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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