Correlation Between Multimedia Portfolio and L Abbett

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

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

Diversification Opportunities for Multimedia Portfolio and L Abbett

0.96

Correlation Coefficient

Multimedia Portfolio  L Abbett

Almost no diversification

The 3 months correlation between Multimedia and LAVVX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Multimedia Portfolio Multimedi and L Abbett Fundamental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett Fundamental and Multimedia Portfolio 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 Multimedia Portfolio Multimedia 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 Fundamental has no effect on the direction of Multimedia Portfolio i.e., Multimedia Portfolio and L Abbett go up and down completely randomly.

Pair Corralation between Multimedia Portfolio and L Abbett

Assuming the 90 days horizon Multimedia Portfolio Multimedia is expected to generate 1.63 times more return on investment than L Abbett. However, Multimedia Portfolio is 1.63 times more volatile than L Abbett Fundamental. It trades about 0.28 of its potential returns per unit of risk. L Abbett Fundamental is currently generating about 0.17 per unit of risk. If you would invest  10,705  in Multimedia Portfolio Multimedia on May 5, 2025 and sell it today you would earn a total of  2,183  from holding Multimedia Portfolio Multimedia or generate 20.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Multimedia Portfolio Multimedi  vs.  L Abbett Fundamental

Multimedia Portfolio

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Multimedia Portfolio Multimedia are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Multimedia Portfolio showed solid returns over the last few months and may actually be approaching a breakup point.

L Abbett Fundamental

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Fundamental are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, L Abbett may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Multimedia Portfolio and L Abbett

The main advantage of trading using opposite Multimedia Portfolio and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimedia Portfolio 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 Multimedia Portfolio Multimedia and L Abbett Fundamental 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.