Correlation Between Growth Opportunities and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Growth Opportunities 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 Growth Opportunities and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Opportunities Fund and Lord Abbett Global, you can compare the effects of market volatilities on Growth Opportunities 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 Growth Opportunities with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Opportunities and Lord Abbett.
Diversification Opportunities for Growth Opportunities and Lord Abbett
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GROWTH and Lord is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Growth Opportunities Fund and Lord Abbett Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Global and Growth Opportunities 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 Growth Opportunities 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 Global has no effect on the direction of Growth Opportunities i.e., Growth Opportunities and Lord Abbett go up and down completely randomly.
Pair Corralation between Growth Opportunities and Lord Abbett
Assuming the 90 days horizon Growth Opportunities Fund is expected to generate 1.47 times more return on investment than Lord Abbett. However, Growth Opportunities is 1.47 times more volatile than Lord Abbett Global. It trades about 0.16 of its potential returns per unit of risk. Lord Abbett Global is currently generating about 0.06 per unit of risk. If you would invest 5,600 in Growth Opportunities Fund on August 31, 2024 and sell it today you would earn a total of 216.00 from holding Growth Opportunities Fund or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Opportunities Fund vs. Lord Abbett Global
Performance |
| Timeline |
| Growth Opportunities |
| Lord Abbett Global |
Growth Opportunities and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Opportunities and Lord Abbett
The main advantage of trading using opposite Growth Opportunities and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Opportunities 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.| Growth Opportunities vs. Europacific Growth Fund | Growth Opportunities vs. Washington Mutual Investors | Growth Opportunities vs. Capital World Growth | Growth Opportunities vs. HUMANA INC |
| Lord Abbett vs. Bbh Partner Fund | Lord Abbett vs. Issachar Fund Class | Lord Abbett vs. Growth Opportunities Fund | Lord Abbett vs. Ab Value 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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