Correlation Between Jensen Quality and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Jensen Quality 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 Jensen Quality and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jensen Quality Value and Lord Abbett Short, you can compare the effects of market volatilities on Jensen Quality 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 Jensen Quality with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jensen Quality and Lord Abbett.
Diversification Opportunities for Jensen Quality and Lord Abbett
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jensen and Lord is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Jensen Quality Value and Lord Abbett Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Short and Jensen Quality 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 Jensen Quality Value 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 Short has no effect on the direction of Jensen Quality i.e., Jensen Quality and Lord Abbett go up and down completely randomly.
Pair Corralation between Jensen Quality and Lord Abbett
Assuming the 90 days horizon Jensen Quality is expected to generate 1.26 times less return on investment than Lord Abbett. In addition to that, Jensen Quality is 3.43 times more volatile than Lord Abbett Short. It trades about 0.04 of its total potential returns per unit of risk. Lord Abbett Short is currently generating about 0.19 per unit of volatility. If you would invest 787.00 in Lord Abbett Short on November 5, 2024 and sell it today you would earn a total of 204.00 from holding Lord Abbett Short or generate 25.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jensen Quality Value vs. Lord Abbett Short
Performance |
| Timeline |
| Jensen Quality Value |
| Lord Abbett Short |
Jensen Quality and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jensen Quality and Lord Abbett
The main advantage of trading using opposite Jensen Quality and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jensen Quality 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.| Jensen Quality vs. Fuhkbx | Jensen Quality vs. Arrow Managed Futures | Jensen Quality vs. Rational Dividend Capture | Jensen Quality vs. Rbb Fund |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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