Correlation Between Elfun Diversified and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified 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 Elfun Diversified and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elfun Diversified Fund and Lord Abbett Diversified, you can compare the effects of market volatilities on Elfun Diversified 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 Elfun Diversified with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Lord Abbett.
Diversification Opportunities for Elfun Diversified and Lord Abbett
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Elfun and Lord is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Lord Abbett Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Diversified and Elfun Diversified 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 Elfun Diversified Fund 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 Diversified has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Lord Abbett go up and down completely randomly.
Pair Corralation between Elfun Diversified and Lord Abbett
Assuming the 90 days horizon Elfun Diversified Fund is expected to generate 1.5 times more return on investment than Lord Abbett. However, Elfun Diversified is 1.5 times more volatile than Lord Abbett Diversified. It trades about 0.11 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about 0.12 per unit of risk. If you would invest 1,661 in Elfun Diversified Fund on September 14, 2024 and sell it today you would earn a total of 539.00 from holding Elfun Diversified Fund or generate 32.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elfun Diversified Fund vs. Lord Abbett Diversified
Performance |
| Timeline |
| Elfun Diversified |
| Lord Abbett Diversified |
Elfun Diversified and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and Lord Abbett
The main advantage of trading using opposite Elfun Diversified and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified 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.| Elfun Diversified vs. Loomis Sayles Inflation | Elfun Diversified vs. Lord Abbett Inflation | Elfun Diversified vs. Goldman Sachs Inflation | Elfun Diversified vs. Ab Bond Inflation |
| Lord Abbett vs. Qs Large Cap | Lord Abbett vs. Qs Large Cap | Lord Abbett vs. Pace Large Value | Lord Abbett vs. Dodge Cox Stock |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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