Correlation Between Lord Abbett and L Abbett

Can any of the company-specific risk be diversified away by investing in both Lord Abbett and L 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 Lord Abbett and L Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lord Abbett Trust and L Abbett Value, you can compare the effects of market volatilities on Lord Abbett and L 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 Lord Abbett with a short position of L Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and L Abbett.

Diversification Opportunities for Lord Abbett and L Abbett

0.76

Correlation Coefficient

Lord Abbett  L Abbett

Poor diversification

The 3 months correlation between Lord and LVOTX is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Trust and L Abbett Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett Value and Lord Abbett 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 Lord Abbett Trust are associated (or correlated) with L Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Abbett Value has no effect on the direction of Lord Abbett i.e., Lord Abbett and L Abbett go up and down completely randomly.

Pair Corralation between Lord Abbett and L Abbett

Assuming the 90 days horizon Lord Abbett Trust is expected to generate 1.12 times more return on investment than L Abbett. However, Lord Abbett is 1.12 times more volatile than L Abbett Value. It trades about 0.09 of its potential returns per unit of risk. L Abbett Value is currently generating about -0.14 per unit of risk. If you would invest  1,498  in Lord Abbett Trust on February 4, 2024 and sell it today you would earn a total of  29.00  from holding Lord Abbett Trust or generate 1.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Lord Abbett Trust  vs.  L Abbett Value

Lord Abbett Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Trust are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Lord Abbett may actually be approaching a critical reversion point that can send shares even higher in June 2024.

L Abbett Value

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Value are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, L Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lord Abbett and L Abbett

The main advantage of trading using opposite Lord Abbett and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, L 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 L Abbett will offset losses from the drop in L Abbett's long position.

The idea behind Lord Abbett Trust and L Abbett Value pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.