Correlation Between Foundry Partners and L Abbett

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

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

Diversification Opportunities for Foundry Partners and L Abbett

0.22

Correlation Coefficient

Foundry Partners  L Abbett

Modest diversification

The 3 months correlation between Foundry and LGLSX is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Foundry Partners Fundamental 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 Foundry Partners 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 Foundry Partners Fundamental 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 Foundry Partners i.e., Foundry Partners and L Abbett go up and down completely randomly.

Pair Corralation between Foundry Partners and L Abbett

Assuming the 90 days horizon Foundry Partners Fundamental is expected to under-perform the L Abbett. In addition to that, Foundry Partners is 2.26 times more volatile than L Abbett Growth. It trades about -0.12 of its total potential returns per unit of risk. L Abbett Growth is currently generating about 0.2 per unit of volatility. If you would invest  4,111  in L Abbett Growth on October 1, 2024 and sell it today you would earn a total of  723.00  from holding L Abbett Growth or generate 17.59% return on investment over 90 days.

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

Foundry Partners Fundamental  vs.  L Abbett Growth

Foundry Partners Fun

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Foundry Partners Fundamental has generated negative risk-adjusted returns adding no value to fund investors. In spite of fragile 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

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Growth are ranked lower than 16 (%) 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 Foundry Partners and L Abbett

The main advantage of trading using opposite Foundry Partners and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foundry Partners 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 Foundry Partners Fundamental 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..