Correlation Between Lord Abbett and Amg River
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Amg River 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 Lord Abbett and Amg River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Balanced and Amg River Road, you can compare the effects of market volatilities on Lord Abbett and Amg River 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 Lord Abbett with a short position of Amg River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Amg River.
Diversification Opportunities for Lord Abbett and Amg River
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lord and Amg is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Balanced and Amg River Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg River Road and Lord Abbett 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 Lord Abbett Balanced are associated (or correlated) with Amg River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg River Road has no effect on the direction of Lord Abbett i.e., Lord Abbett and Amg River go up and down completely randomly.
Pair Corralation between Lord Abbett and Amg River
Assuming the 90 days horizon Lord Abbett Balanced is expected to generate 0.47 times more return on investment than Amg River. However, Lord Abbett Balanced is 2.11 times less risky than Amg River. It trades about 0.11 of its potential returns per unit of risk. Amg River Road is currently generating about 0.05 per unit of risk. If you would invest 979.00 in Lord Abbett Balanced on September 4, 2024 and sell it today you would earn a total of 295.00 from holding Lord Abbett Balanced or generate 30.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Balanced vs. Amg River Road
Performance |
| Timeline |
| Lord Abbett Balanced |
| Amg River Road |
Lord Abbett and Amg River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Amg River
The main advantage of trading using opposite Lord Abbett and Amg River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Amg River 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 Amg River will offset losses from the drop in Amg River's long position.| Lord Abbett vs. Pioneer High Yield | Lord Abbett vs. Fidelity Capital Income | Lord Abbett vs. Prudential High Yield | Lord Abbett vs. Gmo High Yield |
| Amg River vs. Amg River Road | Amg River vs. Champlain Small Pany | Amg River vs. Amg River Road | Amg River vs. Marsico Global Fund |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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