Correlation Between James Alpha and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both James Alpha 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 James Alpha and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Alpha Managed and Lord Abbett Small, you can compare the effects of market volatilities on James Alpha 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 James Alpha with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Alpha and Lord Abbett.
Diversification Opportunities for James Alpha and Lord Abbett
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between James and Lord is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding James Alpha Managed and Lord Abbett Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Small and James Alpha 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 James Alpha Managed 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 Small has no effect on the direction of James Alpha i.e., James Alpha and Lord Abbett go up and down completely randomly.
Pair Corralation between James Alpha and Lord Abbett
Assuming the 90 days horizon James Alpha is expected to generate 2.68 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, James Alpha Managed is 2.16 times less risky than Lord Abbett. It trades about 0.11 of its potential returns per unit of risk. Lord Abbett Small is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,130 in Lord Abbett Small on November 4, 2024 and sell it today you would earn a total of 53.00 from holding Lord Abbett Small or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
James Alpha Managed vs. Lord Abbett Small
Performance |
| Timeline |
| James Alpha Managed |
| Lord Abbett Small |
James Alpha and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Alpha and Lord Abbett
The main advantage of trading using opposite James Alpha and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Alpha 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.| James Alpha vs. Guidepath Conservative Income | James Alpha vs. Federated Hermes Conservative | James Alpha vs. Lord Abbett Diversified | James Alpha vs. Wilmington Diversified Income |
| Lord Abbett vs. Aig Government Money | Lord Abbett vs. Cref Money Market | Lord Abbett vs. Davis Financial Fund | Lord Abbett vs. Schwab Government Money |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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