Correlation Between Dunham Corporate/govern and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Dunham Corporate/govern 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 Dunham Corporate/govern and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Porategovernment Bond and Lord Abbett Bond, you can compare the effects of market volatilities on Dunham Corporate/govern 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 Dunham Corporate/govern with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Corporate/govern and Lord Abbett.
Diversification Opportunities for Dunham Corporate/govern and Lord Abbett
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dunham and Lord is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Lord Abbett Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Bond and Dunham Corporate/govern 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 Dunham Porategovernment Bond 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 Bond has no effect on the direction of Dunham Corporate/govern i.e., Dunham Corporate/govern and Lord Abbett go up and down completely randomly.
Pair Corralation between Dunham Corporate/govern and Lord Abbett
Assuming the 90 days horizon Dunham Corporate/govern is expected to generate 1.76 times less return on investment than Lord Abbett. In addition to that, Dunham Corporate/govern is 1.25 times more volatile than Lord Abbett Bond. It trades about 0.06 of its total potential returns per unit of risk. Lord Abbett Bond is currently generating about 0.13 per unit of volatility. If you would invest 638.00 in Lord Abbett Bond on August 31, 2024 and sell it today you would earn a total of 86.00 from holding Lord Abbett Bond or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Lord Abbett Bond
Performance |
| Timeline |
| Dunham Porategovernment |
| Lord Abbett Bond |
Dunham Corporate/govern and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Corporate/govern and Lord Abbett
The main advantage of trading using opposite Dunham Corporate/govern and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Corporate/govern 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.| Dunham Corporate/govern vs. Metropolitan West Total | Dunham Corporate/govern vs. Metropolitan West Total | Dunham Corporate/govern vs. Pimco Total Return | Dunham Corporate/govern vs. Total Return Fund |
| Lord Abbett vs. Dws Government Money | Lord Abbett vs. Virtus Seix Government | Lord Abbett vs. Franklin Government Money | Lord Abbett vs. Dunham Porategovernment Bond |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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