Correlation Between Value Line and L Abbett

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

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

Diversification Opportunities for Value Line and L Abbett

0.85

Correlation Coefficient

Value Line  L Abbett

Very poor diversification

The 3 months correlation between Value and LGLSX is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Value Line Larger 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 Value Line 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 Value Line Larger 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 Value Line i.e., Value Line and L Abbett go up and down completely randomly.

Pair Corralation between Value Line and L Abbett

Assuming the 90 days horizon Value Line is expected to generate 1.37 times less return on investment than L Abbett. In addition to that, Value Line is 1.01 times more volatile than L Abbett Growth. It trades about 0.14 of its total potential returns per unit of risk. L Abbett Growth is currently generating about 0.2 per unit of volatility. If you would invest  5,041  in L Abbett Growth on July 2, 2025 and sell it today you would earn a total of  645.00  from holding L Abbett Growth or generate 12.8% return on investment over 90 days.

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

Value Line Larger  vs.  L Abbett Growth

Value Line Larger

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Value Line Larger are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Value Line may actually be approaching a critical reversion point that can send shares even higher in October 2025.

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 15 (%) 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.

Pair Trading with Value Line and L Abbett

The main advantage of trading using opposite Value Line and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Line 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 Value Line Larger 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.