Correlation Between Oil Gas and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Oil Gas 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 Oil Gas and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Lord Abbett Growth, you can compare the effects of market volatilities on Oil Gas 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 Oil Gas with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Lord Abbett.
Diversification Opportunities for Oil Gas and Lord Abbett
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oil and Lord is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Lord Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Growth and Oil Gas 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 Oil Gas Ultrasector 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 Growth has no effect on the direction of Oil Gas i.e., Oil Gas and Lord Abbett go up and down completely randomly.
Pair Corralation between Oil Gas and Lord Abbett
Assuming the 90 days horizon Oil Gas is expected to generate 2.52 times less return on investment than Lord Abbett. In addition to that, Oil Gas is 1.26 times more volatile than Lord Abbett Growth. It trades about 0.04 of its total potential returns per unit of risk. Lord Abbett Growth is currently generating about 0.14 per unit of volatility. If you would invest 2,322 in Lord Abbett Growth on September 3, 2024 and sell it today you would earn a total of 585.00 from holding Lord Abbett Growth or generate 25.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Gas Ultrasector vs. Lord Abbett Growth
Performance |
| Timeline |
| Oil Gas Ultrasector |
| Lord Abbett Growth |
Oil Gas and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Gas and Lord Abbett
The main advantage of trading using opposite Oil Gas and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas 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.| Oil Gas vs. Oil Gas Ultrasector | Oil Gas vs. Ultramid Cap Profund Ultramid Cap | Oil Gas vs. Precious Metals Ultrasector | Oil Gas vs. Real Estate Ultrasector |
| Lord Abbett vs. Shelton Emerging Markets | Lord Abbett vs. Artisan Emerging Markets | Lord Abbett vs. Legg Mason Partners | Lord Abbett vs. Jpmorgan Emerging Markets |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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