Correlation Between Smallcap Growth and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Smallcap Growth and Lord Abbett 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 Smallcap Growth and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Growth Fund and Lord Abbett Growth, you can compare the effects of market volatilities on Smallcap Growth and Lord Abbett 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 Smallcap Growth with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Lord Abbett.
Diversification Opportunities for Smallcap Growth and Lord Abbett
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Smallcap and Lord is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth Fund and Lord Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Growth and Smallcap Growth 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 Smallcap Growth Fund are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Growth has no effect on the direction of Smallcap Growth i.e., Smallcap Growth and Lord Abbett go up and down completely randomly.
Pair Corralation between Smallcap Growth and Lord Abbett
Assuming the 90 days horizon Smallcap Growth Fund is expected to under-perform the Lord Abbett. But the mutual fund apears to be less risky and, when comparing its historical volatility, Smallcap Growth Fund is 1.14 times less risky than Lord Abbett. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Lord Abbett Growth is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 4,414 in Lord Abbett Growth on January 11, 2025 and sell it today you would lose (283.00) from holding Lord Abbett Growth or give up 6.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap Growth Fund vs. Lord Abbett Growth
Performance |
| Timeline |
| Smallcap Growth |
| Lord Abbett Growth |
Smallcap Growth and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Growth and Lord Abbett
The main advantage of trading using opposite Smallcap Growth and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Growth position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Smallcap Growth vs. Advent Claymore Convertible | Smallcap Growth vs. Rationalpier 88 Convertible | Smallcap Growth vs. Absolute Convertible Arbitrage | Smallcap Growth vs. Calamos Dynamic Convertible |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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