Correlation Between Fidelity Focused and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Fidelity Focused 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 Focused 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 Focused High and Lord Abbett Short, you can compare the effects of market volatilities on Fidelity Focused 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 Focused with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Focused and Lord Abbett.
Diversification Opportunities for Fidelity Focused and Lord Abbett
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Lord is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Focused High and Lord Abbett Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Short and Fidelity Focused 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 Focused High 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 Short has no effect on the direction of Fidelity Focused i.e., Fidelity Focused and Lord Abbett go up and down completely randomly.
Pair Corralation between Fidelity Focused and Lord Abbett
Assuming the 90 days horizon Fidelity Focused High is expected to generate 1.23 times more return on investment than Lord Abbett. However, Fidelity Focused is 1.23 times more volatile than Lord Abbett Short. It trades about 0.19 of its potential returns per unit of risk. Lord Abbett Short is currently generating about 0.13 per unit of risk. If you would invest 809.00 in Fidelity Focused High on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Fidelity Focused High or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Focused High vs. Lord Abbett Short
Performance |
| Timeline |
| Fidelity Focused High |
| Lord Abbett Short |
Fidelity Focused and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Focused and Lord Abbett
The main advantage of trading using opposite Fidelity Focused and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Focused 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 Focused vs. Fidelity High Income | Fidelity Focused vs. Fidelity Advisor Mortgage | Fidelity Focused vs. Fidelity Advisor Floating | Fidelity Focused vs. Fidelity Total Bond |
| Lord Abbett vs. Towpath Technology | Lord Abbett vs. Goldman Sachs Technology | Lord Abbett vs. Global Technology Portfolio | Lord Abbett vs. Red Oak Technology |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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