Correlation Between Federated Equity and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Federated Equity 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 Federated Equity and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Equity Income and Lord Abbett Global, you can compare the effects of market volatilities on Federated Equity 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 Federated Equity with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Equity and Lord Abbett.
Diversification Opportunities for Federated Equity and Lord Abbett
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FEDERATED and Lord is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Federated Equity Income and Lord Abbett Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Global and Federated Equity 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 Federated Equity Income 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 Global has no effect on the direction of Federated Equity i.e., Federated Equity and Lord Abbett go up and down completely randomly.
Pair Corralation between Federated Equity and Lord Abbett
Assuming the 90 days horizon Federated Equity Income is expected to generate 1.15 times more return on investment than Lord Abbett. However, Federated Equity is 1.15 times more volatile than Lord Abbett Global. It trades about 0.2 of its potential returns per unit of risk. Lord Abbett Global is currently generating about 0.07 per unit of risk. If you would invest 2,566 in Federated Equity Income on August 29, 2024 and sell it today you would earn a total of 96.00 from holding Federated Equity Income or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Equity Income vs. Lord Abbett Global
Performance |
| Timeline |
| Federated Equity Income |
| Lord Abbett Global |
Federated Equity and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Equity and Lord Abbett
The main advantage of trading using opposite Federated Equity and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Equity 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.| Federated Equity vs. Iaadx | Federated Equity vs. T Rowe Price | Federated Equity vs. Acm Dynamic Opportunity | Federated Equity vs. Fa 529 Aggressive |
| Lord Abbett vs. Fidelity Small Cap | Lord Abbett vs. Hennessy Nerstone Mid | Lord Abbett vs. Vanguard Small Cap Value | Lord Abbett vs. Royce Opportunity Fund |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |