Correlation Between Aberdeen Short and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Aberdeen Short 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 Aberdeen Short and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Short Duration and Lord Abbett Diversified, you can compare the effects of market volatilities on Aberdeen Short 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 Aberdeen Short with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Short and Lord Abbett.
Diversification Opportunities for Aberdeen Short and Lord Abbett
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aberdeen and Lord is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Short Duration and Lord Abbett Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Diversified and Aberdeen Short 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 Aberdeen Short Duration 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 Diversified has no effect on the direction of Aberdeen Short i.e., Aberdeen Short and Lord Abbett go up and down completely randomly.
Pair Corralation between Aberdeen Short and Lord Abbett
Assuming the 90 days horizon Aberdeen Short is expected to generate 2.09 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Aberdeen Short Duration is 2.07 times less risky than Lord Abbett. It trades about 0.18 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,533 in Lord Abbett Diversified on September 1, 2024 and sell it today you would earn a total of 119.00 from holding Lord Abbett Diversified or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Aberdeen Short Duration vs. Lord Abbett Diversified
Performance |
| Timeline |
| Aberdeen Short Duration |
| Lord Abbett Diversified |
Aberdeen Short and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Short and Lord Abbett
The main advantage of trading using opposite Aberdeen Short and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Short 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.| Aberdeen Short vs. Us Government Securities | Aberdeen Short vs. Goldman Sachs Government | Aberdeen Short vs. Virtus Seix Government | Aberdeen Short vs. Franklin Government Money |
| Lord Abbett vs. Transamerica Cleartrack Retirement | Lord Abbett vs. Blackrock Moderate Prepared | Lord Abbett vs. Wisdomtree Siegel Moderate | Lord Abbett vs. Target Retirement 2040 |
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 Stocks Directory module to find actively traded stocks across global markets.
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