Correlation Between Federated Kaufmann and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann 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 Federated Kaufmann and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Kaufmann Fund and Lord Abbett Short, you can compare the effects of market volatilities on Federated Kaufmann 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 Federated Kaufmann with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Lord Abbett.
Diversification Opportunities for Federated Kaufmann and Lord Abbett
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Lord is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Fund 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 Federated Kaufmann 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 Federated Kaufmann Fund 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 Federated Kaufmann i.e., Federated Kaufmann and Lord Abbett go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Lord Abbett
Assuming the 90 days horizon Federated Kaufmann Fund is expected to generate 7.22 times more return on investment than Lord Abbett. However, Federated Kaufmann is 7.22 times more volatile than Lord Abbett Short. It trades about 0.05 of its potential returns per unit of risk. Lord Abbett Short is currently generating about 0.26 per unit of risk. If you would invest 569.00 in Federated Kaufmann Fund on November 3, 2024 and sell it today you would earn a total of 45.00 from holding Federated Kaufmann Fund or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Kaufmann Fund vs. Lord Abbett Short
Performance |
| Timeline |
| Federated Kaufmann |
| Lord Abbett Short |
Federated Kaufmann and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Lord Abbett
The main advantage of trading using opposite Federated Kaufmann and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann 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.| Federated Kaufmann vs. Rationalpier 88 Convertible | Federated Kaufmann vs. Baird Quality Intermediate | Federated Kaufmann vs. Ab Bond Inflation | Federated Kaufmann vs. Dreyfusstandish Global Fixed |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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