Correlation Between Lord Abbett and Growth Opportunities
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Growth Opportunities 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 Opportunities 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 Opportunities Fund, you can compare the effects of market volatilities on Lord Abbett and Growth Opportunities 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 Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Growth Opportunities.
Diversification Opportunities for Lord Abbett and Growth Opportunities
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lord and Growth is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Small and Growth Opportunities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Opportunities 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 Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Opportunities has no effect on the direction of Lord Abbett i.e., Lord Abbett and Growth Opportunities go up and down completely randomly.
Pair Corralation between Lord Abbett and Growth Opportunities
Assuming the 90 days horizon Lord Abbett is expected to generate 1.53 times less return on investment than Growth Opportunities. In addition to that, Lord Abbett is 1.12 times more volatile than Growth Opportunities Fund. It trades about 0.07 of its total potential returns per unit of risk. Growth Opportunities Fund is currently generating about 0.11 per unit of volatility. If you would invest 3,358 in Growth Opportunities Fund on September 3, 2024 and sell it today you would earn a total of 2,498 from holding Growth Opportunities Fund or generate 74.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Small vs. Growth Opportunities Fund
Performance |
| Timeline |
| Lord Abbett Small |
| Growth Opportunities |
Lord Abbett and Growth Opportunities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Growth Opportunities
The main advantage of trading using opposite Lord Abbett and Growth Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Growth Opportunities 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 Opportunities will offset losses from the drop in Growth Opportunities' 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 Opportunities vs. Victory Rs Partners | Growth Opportunities vs. Lord Abbett Small | Growth Opportunities vs. Hennessy Nerstone Mid | Growth Opportunities vs. Fpa Queens Road |
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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