Correlation Between American Independence and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both American Independence 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 American Independence and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Independence Kansas and Lord Abbett Diversified, you can compare the effects of market volatilities on American Independence 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 American Independence with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Independence and Lord Abbett.
Diversification Opportunities for American Independence and Lord Abbett
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Lord is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding American Independence Kansas and Lord Abbett Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Diversified and American Independence 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 American Independence Kansas 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 Diversified has no effect on the direction of American Independence i.e., American Independence and Lord Abbett go up and down completely randomly.
Pair Corralation between American Independence and Lord Abbett
Assuming the 90 days horizon American Independence is expected to generate 4.77 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, American Independence Kansas is 1.81 times less risky than Lord Abbett. It trades about 0.05 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,383 in Lord Abbett Diversified on August 31, 2024 and sell it today you would earn a total of 269.00 from holding Lord Abbett Diversified or generate 19.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Independence Kansas vs. Lord Abbett Diversified
Performance |
| Timeline |
| American Independence |
| Lord Abbett Diversified |
American Independence and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Independence and Lord Abbett
The main advantage of trading using opposite American Independence and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Independence 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.| American Independence vs. Colorado Bondshares A | American Independence vs. Virginia Bond Fund | American Independence vs. Usaa Virginia Bond | American Independence vs. Virginia Bond Fund |
| Lord Abbett vs. Blackrock Financial Institutions | Lord Abbett vs. Davis Financial Fund | Lord Abbett vs. 1919 Financial Services | Lord Abbett vs. John Hancock 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |