Correlation Between L Abbett and Ab Conservative

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

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

Diversification Opportunities for L Abbett and Ab Conservative

0.89

Correlation Coefficient

L Abbett  Ab Conservative

Very poor diversification

The 3 months correlation between LGLSX and APWIX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Ab Servative Wealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Servative Wealth and L 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 L Abbett Growth are associated (or correlated) with Ab Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Servative Wealth has no effect on the direction of L Abbett i.e., L Abbett and Ab Conservative go up and down completely randomly.

Pair Corralation between L Abbett and Ab Conservative

Assuming the 90 days horizon L Abbett Growth is expected to generate 2.29 times more return on investment than Ab Conservative. However, L Abbett is 2.29 times more volatile than Ab Servative Wealth. It trades about 0.14 of its potential returns per unit of risk. Ab Servative Wealth is currently generating about 0.12 per unit of risk. If you would invest  5,129  in L Abbett Growth on June 30, 2025 and sell it today you would earn a total of  489.00  from holding L Abbett Growth or generate 9.53% return on investment over 90 days.

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

L Abbett Growth  vs.  Ab Servative Wealth

L Abbett Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Growth are ranked lower than 11 (%) 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 October 2025.

Ab Servative Wealth

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Servative Wealth are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Ab Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with L Abbett and Ab Conservative

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

The idea behind L Abbett Growth and Ab Servative Wealth 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.