Correlation Between Oklahoma College and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Oklahoma College 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 Oklahoma College and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oklahoma College Savings and Lord Abbett High, you can compare the effects of market volatilities on Oklahoma College 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 Oklahoma College with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma College and Lord Abbett.
Diversification Opportunities for Oklahoma College and Lord Abbett
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oklahoma and Lord is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma College Savings and Lord Abbett High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett High and Oklahoma College 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 Oklahoma College Savings 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 High has no effect on the direction of Oklahoma College i.e., Oklahoma College and Lord Abbett go up and down completely randomly.
Pair Corralation between Oklahoma College and Lord Abbett
Assuming the 90 days horizon Oklahoma College is expected to generate 3.22 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Oklahoma College Savings is 1.91 times less risky than Lord Abbett. It trades about 0.03 of its potential returns per unit of risk. Lord Abbett High is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 546.00 in Lord Abbett High on September 3, 2024 and sell it today you would earn a total of 102.00 from holding Lord Abbett High or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oklahoma College Savings vs. Lord Abbett High
Performance |
| Timeline |
| Oklahoma College Savings |
| Lord Abbett High |
Oklahoma College and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oklahoma College and Lord Abbett
The main advantage of trading using opposite Oklahoma College and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma College 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.| Oklahoma College vs. Vanguard Total Stock | Oklahoma College vs. Vanguard 500 Index | Oklahoma College vs. Vanguard Total Stock | Oklahoma College vs. Vanguard Total Stock |
| Lord Abbett vs. Vanguard High Yield Corporate | Lord Abbett vs. Vanguard High Yield Porate | Lord Abbett vs. Blackrock Hi Yld | Lord Abbett vs. Blackrock High Yield |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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