Correlation Between John Hancock and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both John 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 John 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 John Hancock Bond and Lord Abbett Bond, you can compare the effects of market volatilities on John 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 John Hancock with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Hancock and Lord Abbett.
Diversification Opportunities for John Hancock and Lord Abbett
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Lord is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding John Hancock Bond and Lord Abbett Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Bond and John 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 John Hancock Bond 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 Bond has no effect on the direction of John Hancock i.e., John Hancock and Lord Abbett go up and down completely randomly.
Pair Corralation between John Hancock and Lord Abbett
Assuming the 90 days horizon John Hancock is expected to generate 1.95 times less return on investment than Lord Abbett. In addition to that, John Hancock is 1.45 times more volatile than Lord Abbett Bond. It trades about 0.05 of its total potential returns per unit of risk. Lord Abbett Bond is currently generating about 0.14 per unit of volatility. If you would invest 598.00 in Lord Abbett Bond on November 9, 2024 and sell it today you would earn a total of 120.00 from holding Lord Abbett Bond or generate 20.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
John Hancock Bond vs. Lord Abbett Bond
Performance |
| Timeline |
| John Hancock Bond |
| Lord Abbett Bond |
John Hancock and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Hancock and Lord Abbett
The main advantage of trading using opposite John Hancock and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John 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.| John Hancock vs. Simt Multi Asset Inflation | John Hancock vs. Lord Abbett Inflation | John Hancock vs. Aqr Managed Futures | John Hancock vs. Tiaa Cref Inflation Link |
| Lord Abbett vs. Western Asset E | Lord Abbett vs. Auxier Focus Fund | Lord Abbett vs. Bbh Partner Fund | Lord Abbett vs. Rbb Fund |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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