Correlation Between Lord Abbett and Perritt Ultra

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

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

Diversification Opportunities for Lord Abbett and Perritt Ultra

0.0

Correlation Coefficient

Lord Abbett  Perritt Ultra

Pay attention - limited upside

The 3 months correlation between Lord and Perritt is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Growth and Perritt Ultra Microcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perritt Ultra Microcap and Lord 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 Lord Abbett Growth are associated (or correlated) with Perritt Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perritt Ultra Microcap has no effect on the direction of Lord Abbett i.e., Lord Abbett and Perritt Ultra go up and down completely randomly.

Pair Corralation between Lord Abbett and Perritt Ultra

If you would invest (100.00) in Perritt Ultra Microcap on September 4, 2024 and sell it today you would earn a total of  100.00  from holding Perritt Ultra Microcap or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Lord Abbett Growth  vs.  Perritt Ultra Microcap

Lord Abbett Growth

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Lord Abbett Growth has generated negative risk-adjusted returns adding no value to fund investors. 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.

Perritt Ultra Microcap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perritt Ultra Microcap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Perritt Ultra is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lord Abbett and Perritt Ultra

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

The idea behind Lord Abbett Growth and Perritt Ultra Microcap 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.