Correlation Between First American and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both First American 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 First American and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Funds and Lord Abbett Emerging, you can compare the effects of market volatilities on First American 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 First American with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Lord Abbett.
Diversification Opportunities for First American and Lord Abbett
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Lord is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding First American Funds and Lord Abbett Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Emerging and First American 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 First American Funds 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 Emerging has no effect on the direction of First American i.e., First American and Lord Abbett go up and down completely randomly.
Pair Corralation between First American and Lord Abbett
If you would invest 428.00 in Lord Abbett Emerging on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Lord Abbett Emerging or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First American Funds vs. Lord Abbett Emerging
Performance |
| Timeline |
| First American Funds |
| Lord Abbett Emerging |
First American and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Lord Abbett
The main advantage of trading using opposite First American and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American 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.| First American vs. Siit Ultra Short | First American vs. Quantitative Longshort Equity | First American vs. Rbc Short Duration | First American vs. Franklin Federal Limited Term |
| Lord Abbett vs. 1919 Financial Services | Lord Abbett vs. Vanguard Financials Index | Lord Abbett vs. Goldman Sachs Financial | Lord Abbett vs. Fidelity Advisor Financial |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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