Correlation Between J Hancock and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both J Hancock 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 J Hancock and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Hancock Ii and Lord Abbett Diversified, you can compare the effects of market volatilities on J Hancock 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 J Hancock with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Hancock and Lord Abbett.
Diversification Opportunities for J Hancock and Lord Abbett
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JGHTX and Lord is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding J Hancock Ii 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 J Hancock 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 J Hancock Ii 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 J Hancock i.e., J Hancock and Lord Abbett go up and down completely randomly.
Pair Corralation between J Hancock and Lord Abbett
Assuming the 90 days horizon J Hancock Ii is expected to generate 1.9 times more return on investment than Lord Abbett. However, J Hancock is 1.9 times more volatile than Lord Abbett Diversified. It trades about 0.35 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about 0.37 per unit of risk. If you would invest 1,399 in J Hancock Ii on September 5, 2024 and sell it today you would earn a total of 63.00 from holding J Hancock Ii or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
J Hancock Ii vs. Lord Abbett Diversified
Performance |
| Timeline |
| J Hancock Ii |
| Lord Abbett Diversified |
J Hancock and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Hancock and Lord Abbett
The main advantage of trading using opposite J Hancock and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Hancock 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.| J Hancock vs. Lord Abbett Diversified | J Hancock vs. Aqr Diversified Arbitrage | J Hancock vs. Massmutual Premier Diversified | J Hancock vs. Huber Capital Diversified |
| Lord Abbett vs. T Rowe Price | Lord Abbett vs. Transamerica Asset Allocation | Lord Abbett vs. T Rowe Price | Lord Abbett vs. Virtus Dfa 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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