Correlation Between L Abbett and Utilities Ultrasector

Can any of the company-specific risk be diversified away by investing in both L Abbett and Utilities Ultrasector 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 Utilities Ultrasector 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 Utilities Ultrasector Profund, you can compare the effects of market volatilities on L Abbett and Utilities Ultrasector 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 Utilities Ultrasector. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Utilities Ultrasector.

Diversification Opportunities for L Abbett and Utilities Ultrasector

0.84

Correlation Coefficient

L Abbett  Utilities Ultrasector

Very poor diversification

The 3 months correlation between LGLSX and Utilities is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Growth and Utilities Ultrasector Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Ultrasector 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 Utilities Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Ultrasector has no effect on the direction of L Abbett i.e., L Abbett and Utilities Ultrasector go up and down completely randomly.

Pair Corralation between L Abbett and Utilities Ultrasector

Assuming the 90 days horizon L Abbett Growth is expected to generate 0.78 times more return on investment than Utilities Ultrasector. However, L Abbett Growth is 1.28 times less risky than Utilities Ultrasector. It trades about 0.25 of its potential returns per unit of risk. Utilities Ultrasector Profund is currently generating about 0.11 per unit of risk. If you would invest  4,693  in L Abbett Growth on May 16, 2025 and sell it today you would earn a total of  767.00  from holding L Abbett Growth or generate 16.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

L Abbett Growth  vs.  Utilities Ultrasector Profund

L Abbett Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Growth are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, L Abbett showed solid returns over the last few months and may actually be approaching a breakup point.

Utilities Ultrasector

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Utilities Ultrasector Profund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Utilities Ultrasector may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with L Abbett and Utilities Ultrasector

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

The idea behind L Abbett Growth and Utilities Ultrasector Profund 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.