Correlation Between Cohen Steers and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Cohen Steers 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 Cohen Steers and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohen Steers Prfrd and Lord Abbett Micro Cap, you can compare the effects of market volatilities on Cohen Steers 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 Cohen Steers with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohen Steers and Lord Abbett.
Diversification Opportunities for Cohen Steers and Lord Abbett
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cohen and Lord is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Steers Prfrd and Lord Abbett Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Micro and Cohen Steers 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 Cohen Steers Prfrd 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 Micro has no effect on the direction of Cohen Steers i.e., Cohen Steers and Lord Abbett go up and down completely randomly.
Pair Corralation between Cohen Steers and Lord Abbett
Assuming the 90 days horizon Cohen Steers Prfrd is expected to under-perform the Lord Abbett. But the mutual fund apears to be less risky and, when comparing its historical volatility, Cohen Steers Prfrd is 11.66 times less risky than Lord Abbett. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Lord Abbett Micro Cap is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,976 in Lord Abbett Micro Cap on August 29, 2024 and sell it today you would earn a total of 308.00 from holding Lord Abbett Micro Cap or generate 15.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohen Steers Prfrd vs. Lord Abbett Micro Cap
Performance |
| Timeline |
| Cohen Steers Prfrd |
| Lord Abbett Micro |
Cohen Steers and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohen Steers and Lord Abbett
The main advantage of trading using opposite Cohen Steers and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohen Steers 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.| Cohen Steers vs. Delaware Healthcare Fund | Cohen Steers vs. Alger Health Sciences | Cohen Steers vs. Prudential Health Sciences | Cohen Steers vs. Tekla Healthcare Opportunities |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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