Correlation Between Jhancock Multi-index and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Jhancock Multi-index 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 Jhancock Multi-index and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jhancock Multi Index 2065 and Lord Abbett Diversified, you can compare the effects of market volatilities on Jhancock Multi-index 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 Jhancock Multi-index with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Multi-index and Lord Abbett.
Diversification Opportunities for Jhancock Multi-index and Lord Abbett
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jhancock and Lord is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Multi Index 2065 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 Jhancock Multi-index 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 Jhancock Multi Index 2065 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 Jhancock Multi-index i.e., Jhancock Multi-index and Lord Abbett go up and down completely randomly.
Pair Corralation between Jhancock Multi-index and Lord Abbett
Assuming the 90 days horizon Jhancock Multi Index 2065 is expected to generate 1.79 times more return on investment than Lord Abbett. However, Jhancock Multi-index is 1.79 times more volatile than Lord Abbett Diversified. It trades about 0.33 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about 0.39 per unit of risk. If you would invest 1,447 in Jhancock Multi Index 2065 on September 1, 2024 and sell it today you would earn a total of 63.00 from holding Jhancock Multi Index 2065 or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jhancock Multi Index 2065 vs. Lord Abbett Diversified
Performance |
| Timeline |
| Jhancock Multi Index |
| Lord Abbett Diversified |
Jhancock Multi-index and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Multi-index and Lord Abbett
The main advantage of trading using opposite Jhancock Multi-index and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Multi-index 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.| Jhancock Multi-index vs. Regional Bank Fund | Jhancock Multi-index vs. Regional Bank Fund | Jhancock Multi-index vs. Multimanager Lifestyle Moderate | Jhancock Multi-index vs. Multimanager Lifestyle Balanced |
| Lord Abbett vs. Transamerica Cleartrack Retirement | Lord Abbett vs. Blackrock Moderate Prepared | Lord Abbett vs. Wisdomtree Siegel Moderate | Lord Abbett vs. Target Retirement 2040 |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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