Correlation Between Icon Information and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Icon Information 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 Icon Information and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Information Technology and Lord Abbett Short, you can compare the effects of market volatilities on Icon Information 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 Icon Information with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Lord Abbett.
Diversification Opportunities for Icon Information and Lord Abbett
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICON and Lord is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology 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 Icon Information 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 Icon Information Technology 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 Icon Information i.e., Icon Information and Lord Abbett go up and down completely randomly.
Pair Corralation between Icon Information and Lord Abbett
Assuming the 90 days horizon Icon Information Technology is expected to under-perform the Lord Abbett. In addition to that, Icon Information is 5.36 times more volatile than Lord Abbett Short. It trades about -0.09 of its total potential returns per unit of risk. Lord Abbett Short is currently generating about -0.33 per unit of volatility. If you would invest 998.00 in Lord Abbett Short on October 11, 2024 and sell it today you would lose (12.00) from holding Lord Abbett Short or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Icon Information Technology vs. Lord Abbett Short
Performance |
| Timeline |
| Icon Information Tec |
| Lord Abbett Short |
Icon Information and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and Lord Abbett
The main advantage of trading using opposite Icon Information and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information 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.| Icon Information vs. Americafirst Large Cap | Icon Information vs. Fisher Large Cap | Icon Information vs. Guidemark Large Cap | Icon Information vs. Qs Large Cap |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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