Correlation Between Enhanced and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Enhanced 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 Enhanced and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enhanced Large Pany and Lord Abbett Floating, you can compare the effects of market volatilities on Enhanced 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 Enhanced with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enhanced and Lord Abbett.
Diversification Opportunities for Enhanced and Lord Abbett
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Enhanced and Lord is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Enhanced Large Pany and Lord Abbett Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Floating and Enhanced 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 Enhanced Large Pany 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 Floating has no effect on the direction of Enhanced i.e., Enhanced and Lord Abbett go up and down completely randomly.
Pair Corralation between Enhanced and Lord Abbett
Assuming the 90 days horizon Enhanced Large Pany is expected to generate 6.49 times more return on investment than Lord Abbett. However, Enhanced is 6.49 times more volatile than Lord Abbett Floating. It trades about 0.13 of its potential returns per unit of risk. Lord Abbett Floating is currently generating about 0.2 per unit of risk. If you would invest 1,490 in Enhanced Large Pany on August 30, 2024 and sell it today you would earn a total of 64.00 from holding Enhanced Large Pany or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
Enhanced Large Pany vs. Lord Abbett Floating
Performance |
| Timeline |
| Enhanced Large Pany |
| Lord Abbett Floating |
Enhanced and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enhanced and Lord Abbett
The main advantage of trading using opposite Enhanced and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enhanced 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.| Enhanced vs. Us Micro Cap | Enhanced vs. Dfa Short Term Government | Enhanced vs. Emerging Markets Small | Enhanced vs. Dfa One Year Fixed |
| Lord Abbett vs. Government Securities Fund | Lord Abbett vs. Us Government Securities | Lord Abbett vs. John Hancock Government | Lord Abbett vs. Lord Abbett Government |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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