Correlation Between Caterpillar and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Caterpillar 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 Caterpillar and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Lord Abbett Global, you can compare the effects of market volatilities on Caterpillar 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 Caterpillar with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Lord Abbett.
Diversification Opportunities for Caterpillar and Lord Abbett
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caterpillar and Lord is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar 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 Caterpillar 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 Caterpillar 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 Caterpillar i.e., Caterpillar and Lord Abbett go up and down completely randomly.
Pair Corralation between Caterpillar and Lord Abbett
If you would invest (100.00) in Lord Abbett Global on December 1, 2024 and sell it today you would earn a total of 100.00 from holding Lord Abbett Global or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Caterpillar vs. Lord Abbett Global
Performance |
| Timeline |
| Caterpillar |
| Lord Abbett Global |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Caterpillar and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Lord Abbett
The main advantage of trading using opposite Caterpillar and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar 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.| Caterpillar vs. Aquagold International | Caterpillar vs. Thrivent High Yield | Caterpillar vs. Morningstar Unconstrained Allocation | Caterpillar vs. Via Renewables |
| Lord Abbett vs. Intal High Relative | Lord Abbett vs. Rbc Emerging Markets | Lord Abbett vs. Federated Government Income | Lord Abbett vs. Versatile Bond Portfolio |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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