Correlation Between Lord Abbett and Smead Value
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Smead Value 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 Smead Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Affiliated and Smead Value Fund, you can compare the effects of market volatilities on Lord Abbett and Smead Value 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 Smead Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Smead Value.
Diversification Opportunities for Lord Abbett and Smead Value
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lord and Smead is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Affiliated and Smead Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead Value Fund 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 Affiliated are associated (or correlated) with Smead Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Value Fund has no effect on the direction of Lord Abbett i.e., Lord Abbett and Smead Value go up and down completely randomly.
Pair Corralation between Lord Abbett and Smead Value
Assuming the 90 days horizon Lord Abbett Affiliated is expected to under-perform the Smead Value. But the mutual fund apears to be less risky and, when comparing its historical volatility, Lord Abbett Affiliated is 1.5 times less risky than Smead Value. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Smead Value Fund is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 8,288 in Smead Value Fund on January 25, 2024 and sell it today you would lose (70.00) from holding Smead Value Fund or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Affiliated vs. Smead Value Fund
Performance |
| Timeline |
| Lord Abbett Affiliated |
| Smead Value Fund |
Lord Abbett and Smead Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Smead Value
The main advantage of trading using opposite Lord Abbett and Smead Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Smead Value 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 Smead Value will offset losses from the drop in Smead Value's long position.| Lord Abbett vs. Edgewood Growth Fund | Lord Abbett vs. Hartford Schroders Emerging | Lord Abbett vs. HUMANA INC | Lord Abbett vs. Aquagold International |
| Smead Value vs. Edgewood Growth Fund | Smead Value vs. Hartford Schroders Emerging | Smead Value vs. HUMANA INC | Smead Value vs. Aquagold International |
Check out your portfolio center.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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