Correlation Between Lebenthal Lisanti and Lord Abbett

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

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

Diversification Opportunities for Lebenthal Lisanti and Lord Abbett

0.74

Correlation Coefficient

Lebenthal Lisanti  Lord Abbett

Poor diversification

The 3 months correlation between Lebenthal and Lord is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lebenthal Lisanti Small and Lord Abbett Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Investment and Lebenthal Lisanti 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 Lebenthal Lisanti Small 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 Investment has no effect on the direction of Lebenthal Lisanti i.e., Lebenthal Lisanti and Lord Abbett go up and down completely randomly.

Pair Corralation between Lebenthal Lisanti and Lord Abbett

Assuming the 90 days horizon Lebenthal Lisanti Small is expected to generate 13.21 times more return on investment than Lord Abbett. However, Lebenthal Lisanti is 13.21 times more volatile than Lord Abbett Investment. It trades about 0.07 of its potential returns per unit of risk. Lord Abbett Investment is currently generating about 0.18 per unit of risk. If you would invest  2,024  in Lebenthal Lisanti Small on September 26, 2024 and sell it today you would earn a total of  121.00  from holding Lebenthal Lisanti Small or generate 5.98% return on investment over 90 days.

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

Lebenthal Lisanti Small  vs.  Lord Abbett Investment

Lebenthal Lisanti Small

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lebenthal Lisanti Small are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Lebenthal Lisanti may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lord Abbett Investment

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Investment are ranked lower than 13 (%) 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 Lebenthal Lisanti and Lord Abbett

The main advantage of trading using opposite Lebenthal Lisanti and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lebenthal Lisanti 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 Lebenthal Lisanti Small and Lord Abbett Investment 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.