Correlation Between Lord Abbett and Multifactor Equity
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Multifactor Equity 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 Multifactor Equity 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 Multifactor Equity Fund, you can compare the effects of market volatilities on Lord Abbett and Multifactor Equity 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 Multifactor Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Multifactor Equity.
Diversification Opportunities for Lord Abbett and Multifactor Equity
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lord and Multifactor is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and Multifactor Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multifactor Equity 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 Multifactor Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multifactor Equity has no effect on the direction of Lord Abbett i.e., Lord Abbett and Multifactor Equity go up and down completely randomly.
Pair Corralation between Lord Abbett and Multifactor Equity
Assuming the 90 days horizon Lord Abbett Small is expected to generate 1.51 times more return on investment than Multifactor Equity. However, Lord Abbett is 1.51 times more volatile than Multifactor Equity Fund. It trades about 0.11 of its potential returns per unit of risk. Multifactor Equity Fund is currently generating about 0.12 per unit of risk. If you would invest 2,114 in Lord Abbett Small on September 3, 2024 and sell it today you would earn a total of 369.00 from holding Lord Abbett Small or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Small vs. Multifactor Equity Fund
Performance |
| Timeline |
| Lord Abbett Small |
| Multifactor Equity |
Lord Abbett and Multifactor Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Multifactor Equity
The main advantage of trading using opposite Lord Abbett and Multifactor Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Multifactor Equity 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 Multifactor Equity will offset losses from the drop in Multifactor Equity'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 |
| Multifactor Equity vs. Royce Opportunity Fund | Multifactor Equity vs. Heartland Value Plus | Multifactor Equity vs. Ultramid Cap Profund Ultramid Cap | Multifactor Equity vs. Lord Abbett Small |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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