Correlation Between Lord Abbett and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Aqr Large 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 Lord Abbett and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Affiliated and Aqr Large Cap, you can compare the effects of market volatilities on Lord Abbett and Aqr Large 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 Lord Abbett with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Aqr Large.
Diversification Opportunities for Lord Abbett and Aqr Large
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lord and Aqr is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Affiliated and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap and Lord Abbett 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 Lord Abbett Affiliated are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Lord Abbett i.e., Lord Abbett and Aqr Large go up and down completely randomly.
Pair Corralation between Lord Abbett and Aqr Large
Assuming the 90 days horizon Lord Abbett is expected to generate 2.4 times less return on investment than Aqr Large. But when comparing it to its historical volatility, Lord Abbett Affiliated is 1.33 times less risky than Aqr Large. It trades about 0.12 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,427 in Aqr Large Cap on August 24, 2024 and sell it today you would earn a total of 128.00 from holding Aqr Large Cap or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lord Abbett Affiliated vs. Aqr Large Cap
Performance |
| Timeline |
| Lord Abbett Affiliated |
| Aqr Large Cap |
Lord Abbett and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Aqr Large
The main advantage of trading using opposite Lord Abbett and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| Lord Abbett vs. Smallcap Growth Fund | Lord Abbett vs. Growth Fund Of | Lord Abbett vs. Mid Cap Growth | Lord Abbett vs. Champlain Mid Cap |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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