Correlation Between Oppenheimer Value and L Abbett

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

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

Diversification Opportunities for Oppenheimer Value and L Abbett

-0.03

Correlation Coefficient

Oppenheimer Value  L Abbett

Good diversification

The 3 months correlation between Oppenheimer and LGLSX is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Value Fd 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 Oppenheimer Value 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 Oppenheimer Value Fd 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 Oppenheimer Value i.e., Oppenheimer Value and L Abbett go up and down completely randomly.

Pair Corralation between Oppenheimer Value and L Abbett

Assuming the 90 days horizon Oppenheimer Value Fd is expected to under-perform the L Abbett. But the mutual fund apears to be less risky and, when comparing its historical volatility, Oppenheimer Value Fd is 1.24 times less risky than L Abbett. The mutual fund trades about -0.01 of its potential returns per unit of risk. The L Abbett Growth is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,268  in L Abbett Growth on September 24, 2024 and sell it today you would earn a total of  1,559  from holding L Abbett Growth or generate 47.71% return on investment over 90 days.

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

Oppenheimer Value Fd  vs.  L Abbett Growth

Oppenheimer Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Value Fd has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

L Abbett Growth

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Growth are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, L Abbett showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oppenheimer Value and L Abbett

The main advantage of trading using opposite Oppenheimer Value and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Value 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 Oppenheimer Value Fd 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.