Correlation Between Voya Smallcap and Lord Abbett

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

By analyzing existing cross correlation between Voya Smallcap Opportunities and Lord Abbett Developing, you can compare the effects of market volatilities on Voya Smallcap and Lord 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 Voya Smallcap with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Smallcap and Lord Abbett.

Diversification Opportunities for Voya Smallcap and Lord Abbett

0.0

Correlation Coefficient

Voya Smallcap  Lord Abbett

Pay attention - limited upside

The 3 months correlation between Voya and Lord is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Voya Smallcap Opportunities and Lord Abbett Developing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Developing and Voya Smallcap 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 Voya Smallcap Opportunities are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Developing has no effect on the direction of Voya Smallcap i.e., Voya Smallcap and Lord Abbett go up and down completely randomly.

Pair Corralation between Voya Smallcap and Lord Abbett

If you would invest (100.00) in Voya Smallcap Opportunities on January 24, 2024 and sell it today you would earn a total of  100.00  from holding Voya Smallcap Opportunities or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Voya Smallcap Opportunities  vs.  Lord Abbett Developing

Voya Smallcap Opport

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Smallcap Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Voya Smallcap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lord Abbett Developing

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Developing are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lord Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Voya Smallcap and Lord Abbett

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

The idea behind Voya Smallcap Opportunities and Lord Abbett Developing 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.