Correlation Between Abbey Capital and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Abbey Capital 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 Abbey Capital and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbey Capital Futures and Lord Abbett Convertible, you can compare the effects of market volatilities on Abbey Capital 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 Abbey Capital with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbey Capital and Lord Abbett.
Diversification Opportunities for Abbey Capital and Lord Abbett
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Abbey and Lord is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Abbey Capital Futures and Lord Abbett Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Convertible and Abbey Capital 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 Abbey Capital Futures 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 Convertible has no effect on the direction of Abbey Capital i.e., Abbey Capital and Lord Abbett go up and down completely randomly.
Pair Corralation between Abbey Capital and Lord Abbett
Assuming the 90 days horizon Abbey Capital is expected to generate 3.12 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Abbey Capital Futures is 1.61 times less risky than Lord Abbett. It trades about 0.07 of its potential returns per unit of risk. Lord Abbett Convertible is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,451 in Lord Abbett Convertible on November 6, 2024 and sell it today you would earn a total of 29.00 from holding Lord Abbett Convertible or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbey Capital Futures vs. Lord Abbett Convertible
Performance |
| Timeline |
| Abbey Capital Futures |
| Lord Abbett Convertible |
Abbey Capital and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbey Capital and Lord Abbett
The main advantage of trading using opposite Abbey Capital and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbey Capital 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.| Abbey Capital vs. Invesco Energy Fund | Abbey Capital vs. Adams Natural Resources | Abbey Capital vs. Gamco Natural Resources | Abbey Capital vs. Alpsalerian Energy Infrastructure |
| Lord Abbett vs. John Hancock Money | Lord Abbett vs. Money Market Obligations | Lord Abbett vs. Putnam Money Market | Lord Abbett vs. Edward Jones Money |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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