Correlation Between L Abbett and Ivy E

Can any of the company-specific risk be diversified away by investing in both L Abbett and Ivy E 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 Ivy E 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 Ivy E Equity, you can compare the effects of market volatilities on L Abbett and Ivy E 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 Ivy E. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Abbett and Ivy E.

Diversification Opportunities for L Abbett and Ivy E

0.98

Correlation Coefficient

L Abbett  Ivy E

Almost no diversification

The 3 months correlation between LAVVX and Ivy is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding L Abbett Fundamental and Ivy E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy E Equity 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 Ivy E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy E Equity has no effect on the direction of L Abbett i.e., L Abbett and Ivy E go up and down completely randomly.

Pair Corralation between L Abbett and Ivy E

Assuming the 90 days horizon L Abbett Fundamental is expected to generate 0.75 times more return on investment than Ivy E. However, L Abbett Fundamental is 1.34 times less risky than Ivy E. It trades about 0.11 of its potential returns per unit of risk. Ivy E Equity is currently generating about 0.07 per unit of risk. If you would invest  1,219  in L Abbett Fundamental on September 12, 2024 and sell it today you would earn a total of  362.00  from holding L Abbett Fundamental or generate 29.7% return on investment over 90 days.

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

L Abbett Fundamental  vs.  Ivy E Equity

L Abbett Fundamental

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Fundamental 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 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ivy E Equity

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ivy E Equity are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ivy E may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with L Abbett and Ivy E

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

The idea behind L Abbett Fundamental and Ivy E Equity 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.