Correlation Between Short Duration and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Short Duration 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 Short Duration and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Duration Inflation and Lord Abbett Small, you can compare the effects of market volatilities on Short Duration 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 Short Duration with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Duration and Lord Abbett.
Diversification Opportunities for Short Duration and Lord Abbett
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Short and Lord is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Short Duration Inflation and Lord Abbett Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Small and Short Duration 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 Short Duration Inflation 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 Small has no effect on the direction of Short Duration i.e., Short Duration and Lord Abbett go up and down completely randomly.
Pair Corralation between Short Duration and Lord Abbett
Assuming the 90 days horizon Short Duration Inflation is expected to generate 0.1 times more return on investment than Lord Abbett. However, Short Duration Inflation is 10.15 times less risky than Lord Abbett. It trades about 0.14 of its potential returns per unit of risk. Lord Abbett Small is currently generating about -0.03 per unit of risk. If you would invest 1,008 in Short Duration Inflation on October 18, 2024 and sell it today you would earn a total of 26.00 from holding Short Duration Inflation or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Short Duration Inflation vs. Lord Abbett Small
Performance |
| Timeline |
| Short Duration Inflation |
| Lord Abbett Small |
Short Duration and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Duration and Lord Abbett
The main advantage of trading using opposite Short Duration and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Duration 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.| Short Duration vs. Mid Cap Value | Short Duration vs. Equity Growth Fund | Short Duration vs. Income Growth Fund | Short Duration vs. Diversified Bond Fund |
| Lord Abbett vs. Asg Managed Futures | Lord Abbett vs. Short Duration Inflation | Lord Abbett vs. Aqr Managed Futures | Lord Abbett vs. Lord Abbett Inflation |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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