Correlation Between Amg River and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Amg River 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 Amg River and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg River Road and Lord Abbett Small, you can compare the effects of market volatilities on Amg River 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 Amg River with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and Lord Abbett.
Diversification Opportunities for Amg River and Lord Abbett
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amg and Lord is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road 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 Amg River 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 Amg River Road 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 Amg River i.e., Amg River and Lord Abbett go up and down completely randomly.
Pair Corralation between Amg River and Lord Abbett
Assuming the 90 days horizon Amg River is expected to generate 1.12 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Amg River Road is 1.2 times less risky than Lord Abbett. It trades about 0.1 of its potential returns per unit of risk. Lord Abbett Small is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,990 in Lord Abbett Small on August 28, 2024 and sell it today you would earn a total of 487.00 from holding Lord Abbett Small or generate 24.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg River Road vs. Lord Abbett Small
Performance |
| Timeline |
| Amg River Road |
| Lord Abbett Small |
Amg River and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and Lord Abbett
The main advantage of trading using opposite Amg River and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River 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.| Amg River vs. Amg River Road | Amg River vs. Champlain Small Pany | Amg River vs. Amg River Road | Amg River vs. Marsico Global Fund |
| Lord Abbett vs. Pace High Yield | Lord Abbett vs. Alliancebernstein Global High | Lord Abbett vs. Artisan High Income | Lord Abbett vs. Pace High Yield |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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