Correlation Between Kentucky Tax and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Kentucky Tax 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 Kentucky Tax and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kentucky Tax Free Short To Medium and Lord Abbett Short, you can compare the effects of market volatilities on Kentucky Tax 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 Kentucky Tax with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kentucky Tax and Lord Abbett.
Diversification Opportunities for Kentucky Tax and Lord Abbett
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kentucky and Lord is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kentucky Tax Free Short To Med 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 Kentucky Tax 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 Kentucky Tax Free Short To Medium 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 Kentucky Tax i.e., Kentucky Tax and Lord Abbett go up and down completely randomly.
Pair Corralation between Kentucky Tax and Lord Abbett
Assuming the 90 days horizon Kentucky Tax Free Short To Medium is expected to generate 1.5 times more return on investment than Lord Abbett. However, Kentucky Tax is 1.5 times more volatile than Lord Abbett Short. It trades about 0.22 of its potential returns per unit of risk. Lord Abbett Short is currently generating about 0.22 per unit of risk. If you would invest 513.00 in Kentucky Tax Free Short To Medium on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Kentucky Tax Free Short To Medium or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kentucky Tax Free Short To Med vs. Lord Abbett Short
Performance |
| Timeline |
| Kentucky Tax Free |
| Lord Abbett Short |
Kentucky Tax and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kentucky Tax and Lord Abbett
The main advantage of trading using opposite Kentucky Tax and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kentucky Tax 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.| Kentucky Tax vs. SCOR PK | Kentucky Tax vs. Morningstar Unconstrained Allocation | Kentucky Tax vs. Thrivent High Yield | Kentucky Tax vs. Via Renewables |
| Lord Abbett vs. Vanguard Short Term Bond | Lord Abbett vs. Vanguard Short Term Investment Grade | Lord Abbett vs. Vanguard Short Term Investment Grade | Lord Abbett vs. Vanguard Short Term Investment Grade |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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