Correlation Between Simt Tax-managed and L Abbett

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

By analyzing existing cross correlation between Simt Tax Managed Smallmid and L Abbett Growth, you can compare the effects of market volatilities on Simt Tax-managed 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 Simt Tax-managed with a short position of L Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Tax-managed and L Abbett.

Diversification Opportunities for Simt Tax-managed and L Abbett

0.53

Correlation Coefficient

Simt Tax-managed  L Abbett

Very weak diversification

The 3 months correlation between Simt and LGLSX is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Simt Tax Managed Smallmid and L Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett Growth and Simt Tax-managed 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 Simt Tax Managed Smallmid 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 Growth has no effect on the direction of Simt Tax-managed i.e., Simt Tax-managed and L Abbett go up and down completely randomly.

Pair Corralation between Simt Tax-managed and L Abbett

Assuming the 90 days horizon Simt Tax-managed is expected to generate 1.9 times less return on investment than L Abbett. But when comparing it to its historical volatility, Simt Tax Managed Smallmid is 1.02 times less risky than L Abbett. It trades about 0.17 of its potential returns per unit of risk. L Abbett Growth is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  4,270  in L Abbett Growth on April 30, 2025 and sell it today you would earn a total of  981.00  from holding L Abbett Growth or generate 22.97% return on investment over 90 days.

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

Simt Tax Managed Smallmid  vs.  L Abbett Growth

Simt Tax Managed

Risk-Adjusted Performance

Good

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

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 25 (%) 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.

Pair Trading with Simt Tax-managed and L Abbett

The main advantage of trading using opposite Simt Tax-managed and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Tax-managed 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 Simt Tax Managed Smallmid and L Abbett Growth 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.