Correlation Between Dreyfus Bond and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Dreyfus Bond 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 Dreyfus Bond and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus Bond Market and Lord Abbett Small, you can compare the effects of market volatilities on Dreyfus Bond 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 Dreyfus Bond with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Bond and Lord Abbett.
Diversification Opportunities for Dreyfus Bond and Lord Abbett
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreyfus and Lord is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Bond Market 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 Dreyfus Bond 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 Dreyfus Bond Market 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 Dreyfus Bond i.e., Dreyfus Bond and Lord Abbett go up and down completely randomly.
Pair Corralation between Dreyfus Bond and Lord Abbett
Assuming the 90 days horizon Dreyfus Bond is expected to generate 3.4 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Dreyfus Bond Market is 3.04 times less risky than Lord Abbett. It trades about 0.03 of its potential returns per unit of risk. Lord Abbett Small is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,844 in Lord Abbett Small on October 31, 2024 and sell it today you would earn a total of 321.00 from holding Lord Abbett Small or generate 17.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus Bond Market vs. Lord Abbett Small
Performance |
| Timeline |
| Dreyfus Bond Market |
| Lord Abbett Small |
Dreyfus Bond and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Bond and Lord Abbett
The main advantage of trading using opposite Dreyfus Bond and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus Bond 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.| Dreyfus Bond vs. Applied Finance Explorer | Dreyfus Bond vs. Ultramid Cap Profund Ultramid Cap | Dreyfus Bond vs. Lsv Small Cap | Dreyfus Bond vs. Fpa Queens Road |
| Lord Abbett vs. Tortoise Energy Independence | Lord Abbett vs. Hennessy Bp Energy | Lord Abbett vs. World Energy Fund | Lord Abbett vs. Fidelity Advisor Energy |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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