Correlation Between Lord Abbett and Simt Small

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

By analyzing existing cross correlation between Lord Abbett Short and Simt Small Cap, you can compare the effects of market volatilities on Lord Abbett and Simt Small 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 Simt Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Simt Small.

Diversification Opportunities for Lord Abbett and Simt Small

0.85

Correlation Coefficient

Lord Abbett  Simt Small

Very poor diversification

The 3 months correlation between Lord and Simt is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Simt Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Small Cap 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 Short are associated (or correlated) with Simt Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Small Cap has no effect on the direction of Lord Abbett i.e., Lord Abbett and Simt Small go up and down completely randomly.

Pair Corralation between Lord Abbett and Simt Small

Assuming the 90 days horizon Lord Abbett is expected to generate 3.48 times less return on investment than Simt Small. But when comparing it to its historical volatility, Lord Abbett Short is 6.35 times less risky than Simt Small. It trades about 0.22 of its potential returns per unit of risk. Simt Small Cap is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,446  in Simt Small Cap on July 19, 2025 and sell it today you would earn a total of  288.00  from holding Simt Small Cap or generate 8.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Lord Abbett Short  vs.  Simt Small Cap

Lord Abbett Short

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Short are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Lord Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Simt Small Cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Small Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Simt Small may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Lord Abbett and Simt Small

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

The idea behind Lord Abbett Short and Simt Small Cap 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.