Correlation Between Touchstone Small and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Touchstone Small 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 Touchstone Small and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Small Cap and Lord Abbett National, you can compare the effects of market volatilities on Touchstone Small 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 Touchstone Small with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Lord Abbett.
Diversification Opportunities for Touchstone Small and Lord Abbett
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Touchstone and Lord is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Lord Abbett National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett National and Touchstone Small 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 Touchstone 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 National has no effect on the direction of Touchstone Small i.e., Touchstone Small and Lord Abbett go up and down completely randomly.
Pair Corralation between Touchstone Small and Lord Abbett
Assuming the 90 days horizon Touchstone Small Cap is expected to generate 5.1 times more return on investment than Lord Abbett. However, Touchstone Small is 5.1 times more volatile than Lord Abbett National. It trades about 0.13 of its potential returns per unit of risk. Lord Abbett National is currently generating about 0.14 per unit of risk. If you would invest 3,473 in Touchstone Small Cap on September 5, 2024 and sell it today you would earn a total of 682.00 from holding Touchstone Small Cap or generate 19.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Lord Abbett National
Performance |
| Timeline |
| Touchstone Small Cap |
| Lord Abbett National |
Touchstone Small and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Lord Abbett
The main advantage of trading using opposite Touchstone Small and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small 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.| Touchstone Small vs. Heartland Value Plus | Touchstone Small vs. Queens Road Small | Touchstone Small vs. Hennessy Nerstone Mid | Touchstone Small vs. Amg River Road |
| Lord Abbett vs. Touchstone Small Cap | Lord Abbett vs. Champlain Small | Lord Abbett vs. Qs Small Capitalization | Lord Abbett vs. Tax Managed Mid Small |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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