Correlation Between Lord Abbett and Praxis Small
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Praxis Small 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 Praxis Small 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 Praxis Small Cap, you can compare the effects of market volatilities on Lord Abbett and Praxis Small 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 Praxis Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Praxis Small.
Diversification Opportunities for Lord Abbett and Praxis Small
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Praxis is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Praxis Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Small Cap 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 Praxis Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Small Cap has no effect on the direction of Lord Abbett i.e., Lord Abbett and Praxis Small go up and down completely randomly.
Pair Corralation between Lord Abbett and Praxis Small
Assuming the 90 days horizon Lord Abbett Short is expected to generate 0.2 times more return on investment than Praxis Small. However, Lord Abbett Short is 4.96 times less risky than Praxis Small. It trades about 0.18 of its potential returns per unit of risk. Praxis Small Cap is currently generating about 0.03 per unit of risk. If you would invest 797.00 in Lord Abbett Short on October 28, 2024 and sell it today you would earn a total of 193.00 from holding Lord Abbett Short or generate 24.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Short vs. Praxis Small Cap
Performance |
| Timeline |
| Lord Abbett Short |
| Praxis Small Cap |
Lord Abbett and Praxis Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Praxis Small
The main advantage of trading using opposite Lord Abbett and Praxis Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Praxis Small 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 Praxis Small will offset losses from the drop in Praxis Small's long position.| Lord Abbett vs. Legg Mason Global | Lord Abbett vs. Dws Global Macro | Lord Abbett vs. Alliancebernstein Global Highome | Lord Abbett vs. Templeton Global Balanced |
| Praxis Small vs. Qs Large Cap | Praxis Small vs. Fbanjx | Praxis Small vs. Tax Managed Large Cap | Praxis Small vs. Rational Dividend Capture |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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