Correlation Between Ab Discovery and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Ab Discovery 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 Ab Discovery and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Discovery Value and Lord Abbett Global, you can compare the effects of market volatilities on Ab Discovery 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 Ab Discovery with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Discovery and Lord Abbett.
Diversification Opportunities for Ab Discovery and Lord Abbett
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between ABYSX and Lord is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ab Discovery Value and Lord Abbett Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Global and Ab Discovery 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 Ab Discovery Value 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 Global has no effect on the direction of Ab Discovery i.e., Ab Discovery and Lord Abbett go up and down completely randomly.
Pair Corralation between Ab Discovery and Lord Abbett
Assuming the 90 days horizon Ab Discovery Value is expected to generate 2.99 times more return on investment than Lord Abbett. However, Ab Discovery is 2.99 times more volatile than Lord Abbett Global. It trades about 0.05 of its potential returns per unit of risk. Lord Abbett Global is currently generating about 0.05 per unit of risk. If you would invest 2,009 in Ab Discovery Value on September 13, 2024 and sell it today you would earn a total of 587.00 from holding Ab Discovery Value or generate 29.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.95% |
| Values | Daily Returns |
Ab Discovery Value vs. Lord Abbett Global
Performance |
| Timeline |
| Ab Discovery Value |
| Lord Abbett Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ab Discovery and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Discovery and Lord Abbett
The main advantage of trading using opposite Ab Discovery and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Discovery 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.| Ab Discovery vs. Small Cap Core | Ab Discovery vs. Aquagold International | Ab Discovery vs. Morningstar Unconstrained Allocation | Ab Discovery vs. Thrivent High Yield |
| Lord Abbett vs. Ab Discovery Value | Lord Abbett vs. Ab Small Cap | Lord Abbett vs. Fidelity Small Cap | Lord Abbett vs. Palm Valley Capital |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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