Correlation Between Fidelity California and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Fidelity California 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 Fidelity California and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity California Municipal and Lord Abbett Intermediate, you can compare the effects of market volatilities on Fidelity California 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 Fidelity California with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity California and Lord Abbett.
Diversification Opportunities for Fidelity California and Lord Abbett
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Lord is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity California Municipal and Lord Abbett Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Intermediate and Fidelity California 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 Fidelity California Municipal 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 Intermediate has no effect on the direction of Fidelity California i.e., Fidelity California and Lord Abbett go up and down completely randomly.
Pair Corralation between Fidelity California and Lord Abbett
Assuming the 90 days horizon Fidelity California Municipal is expected to under-perform the Lord Abbett. In addition to that, Fidelity California is 1.25 times more volatile than Lord Abbett Intermediate. It trades about -0.31 of its total potential returns per unit of risk. Lord Abbett Intermediate is currently generating about -0.29 per unit of volatility. If you would invest 1,036 in Lord Abbett Intermediate on October 11, 2024 and sell it today you would lose (14.00) from holding Lord Abbett Intermediate or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fidelity California Municipal vs. Lord Abbett Intermediate
Performance |
| Timeline |
| Fidelity California |
| Lord Abbett Intermediate |
Fidelity California and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity California and Lord Abbett
The main advantage of trading using opposite Fidelity California and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity California 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.| Fidelity California vs. T Rowe Price | Fidelity California vs. Alliancebernstein National Municipalome | Fidelity California vs. Virtus Seix Government | Fidelity California vs. Franklin Adjustable Government |
| Lord Abbett vs. Financials Ultrasector Profund | Lord Abbett vs. Blackrock Financial Institutions | Lord Abbett vs. Rmb Mendon Financial | Lord Abbett vs. Blackstone Secured Lending |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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