Correlation Between L Abbett and Commodities Strategy
Can any of the company-specific risk be diversified away by investing in both L Abbett and Commodities Strategy 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 L Abbett and Commodities Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L Abbett Fundamental and Commodities Strategy Fund, you can compare the effects of market volatilities on L Abbett and Commodities Strategy 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 L Abbett with a short position of Commodities Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Commodities Strategy.
Diversification Opportunities for L Abbett and Commodities Strategy
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LAVVX and Commodities is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Fundamental and Commodities Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodities Strategy and L 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 L Abbett Fundamental are associated (or correlated) with Commodities Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodities Strategy has no effect on the direction of L Abbett i.e., L Abbett and Commodities Strategy go up and down completely randomly.
Pair Corralation between L Abbett and Commodities Strategy
Assuming the 90 days horizon L Abbett Fundamental is expected to generate 0.64 times more return on investment than Commodities Strategy. However, L Abbett Fundamental is 1.56 times less risky than Commodities Strategy. It trades about 0.29 of its potential returns per unit of risk. Commodities Strategy Fund is currently generating about 0.07 per unit of risk. If you would invest 1,442 in L Abbett Fundamental on April 22, 2025 and sell it today you would earn a total of 189.00 from holding L Abbett Fundamental or generate 13.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
L Abbett Fundamental vs. Commodities Strategy Fund
Performance |
| Timeline |
| L Abbett Fundamental |
| Commodities Strategy |
L Abbett and Commodities Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Abbett and Commodities Strategy
The main advantage of trading using opposite L Abbett and Commodities Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Abbett position performs unexpectedly, Commodities Strategy 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 Commodities Strategy will offset losses from the drop in Commodities Strategy's long position.| L Abbett vs. Dodge Global Stock | L Abbett vs. Calvert Global Energy | L Abbett vs. Barings Global Floating | L Abbett vs. Morningstar Global Income |
| Commodities Strategy vs. Boston Partners Small | Commodities Strategy vs. Applied Finance Explorer | Commodities Strategy vs. Hennessy Nerstone Mid | Commodities Strategy vs. Great West Loomis Sayles |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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