Correlation Between Lord Abbett and Value Fund
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Value Fund 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 Value Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Short and Value Fund R5, you can compare the effects of market volatilities on Lord Abbett and Value Fund 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 Value Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Value Fund.
Diversification Opportunities for Lord Abbett and Value Fund
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Value is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Value Fund R5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund R5 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 Short are associated (or correlated) with Value Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund R5 has no effect on the direction of Lord Abbett i.e., Lord Abbett and Value Fund go up and down completely randomly.
Pair Corralation between Lord Abbett and Value Fund
Assuming the 90 days horizon Lord Abbett is expected to generate 10.13 times less return on investment than Value Fund. But when comparing it to its historical volatility, Lord Abbett Short is 4.73 times less risky than Value Fund. It trades about 0.13 of its potential returns per unit of risk. Value Fund R5 is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 770.00 in Value Fund R5 on November 3, 2024 and sell it today you would earn a total of 32.00 from holding Value Fund R5 or generate 4.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Short vs. Value Fund R5
Performance |
| Timeline |
| Lord Abbett Short |
| Value Fund R5 |
Lord Abbett and Value Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Value Fund
The main advantage of trading using opposite Lord Abbett and Value Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Value Fund 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 Value Fund will offset losses from the drop in Value Fund's long position.| Lord Abbett vs. Towpath Technology | Lord Abbett vs. Goldman Sachs Technology | Lord Abbett vs. Global Technology Portfolio | Lord Abbett vs. Red Oak Technology |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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