Correlation Between Summit Global and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Summit Global 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 Summit Global and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Global Investments and Lord Abbett Convertible, you can compare the effects of market volatilities on Summit Global 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 Summit Global with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Global and Lord Abbett.
Diversification Opportunities for Summit Global and Lord Abbett
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Summit and Lord is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Summit Global Investments and Lord Abbett Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Convertible and Summit Global 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 Summit Global Investments 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 Convertible has no effect on the direction of Summit Global i.e., Summit Global and Lord Abbett go up and down completely randomly.
Pair Corralation between Summit Global and Lord Abbett
Assuming the 90 days horizon Summit Global Investments is expected to generate 1.31 times more return on investment than Lord Abbett. However, Summit Global is 1.31 times more volatile than Lord Abbett Convertible. It trades about 0.12 of its potential returns per unit of risk. Lord Abbett Convertible is currently generating about 0.15 per unit of risk. If you would invest 1,699 in Summit Global Investments on September 4, 2024 and sell it today you would earn a total of 453.00 from holding Summit Global Investments or generate 26.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Global Investments vs. Lord Abbett Convertible
Performance |
| Timeline |
| Summit Global Investments |
| Lord Abbett Convertible |
Summit Global and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Global and Lord Abbett
The main advantage of trading using opposite Summit Global and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Global 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.| Summit Global vs. Gamco Natural Resources | Summit Global vs. Calvert Global Energy | Summit Global vs. World Energy Fund | Summit Global vs. Adams Natural Resources |
| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate Fund |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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