Correlation Between Virtus Kar and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Virtus Kar 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 Virtus Kar and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Kar Small Cap and Lord Abbett Micro Cap, you can compare the effects of market volatilities on Virtus Kar 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 Virtus Kar with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Kar and Lord Abbett.
Diversification Opportunities for Virtus Kar and Lord Abbett
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and Lord is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Kar Small Cap and Lord Abbett Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Micro and Virtus Kar 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 Virtus Kar Small Cap 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 Micro has no effect on the direction of Virtus Kar i.e., Virtus Kar and Lord Abbett go up and down completely randomly.
Pair Corralation between Virtus Kar and Lord Abbett
Assuming the 90 days horizon Virtus Kar Small Cap is expected to under-perform the Lord Abbett. In addition to that, Virtus Kar is 1.24 times more volatile than Lord Abbett Micro Cap. It trades about -0.23 of its total potential returns per unit of risk. Lord Abbett Micro Cap is currently generating about -0.14 per unit of volatility. If you would invest 2,285 in Lord Abbett Micro Cap on November 27, 2024 and sell it today you would lose (277.00) from holding Lord Abbett Micro Cap or give up 12.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Kar Small Cap vs. Lord Abbett Micro Cap
Performance |
| Timeline |
| Virtus Kar Small |
| Lord Abbett Micro |
Virtus Kar and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Kar and Lord Abbett
The main advantage of trading using opposite Virtus Kar and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Kar 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.| Virtus Kar vs. Virtus Kar Mid Cap | Virtus Kar vs. Midcap Fund Institutional | Virtus Kar vs. Morgan Stanley Multi | Virtus Kar vs. Growth Portfolio Class |
| Lord Abbett vs. Driehaus Micro Cap | Lord Abbett vs. Virtus Kar Small Cap | Lord Abbett vs. Morgan Stanley Multi | Lord Abbett vs. Internet Ultrasector Profund |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |