Correlation Between Lord Abbett and Massmutual Premier
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Massmutual Premier 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 Massmutual Premier 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 Massmutual Premier Small, you can compare the effects of market volatilities on Lord Abbett and Massmutual Premier 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 Massmutual Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Massmutual Premier.
Diversification Opportunities for Lord Abbett and Massmutual Premier
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Massmutual is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Affiliated and Massmutual Premier Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier Small 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 Massmutual Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier Small has no effect on the direction of Lord Abbett i.e., Lord Abbett and Massmutual Premier go up and down completely randomly.
Pair Corralation between Lord Abbett and Massmutual Premier
Assuming the 90 days horizon Lord Abbett Affiliated is expected to under-perform the Massmutual Premier. In addition to that, Lord Abbett is 1.07 times more volatile than Massmutual Premier Small. It trades about -0.25 of its total potential returns per unit of risk. Massmutual Premier Small is currently generating about 0.04 per unit of volatility. If you would invest 1,925 in Massmutual Premier Small on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Massmutual Premier Small or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lord Abbett Affiliated vs. Massmutual Premier Small
Performance |
| Timeline |
| Lord Abbett Affiliated |
| Massmutual Premier Small |
Lord Abbett and Massmutual Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Massmutual Premier
The main advantage of trading using opposite Lord Abbett and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Massmutual Premier 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 Massmutual Premier will offset losses from the drop in Massmutual Premier's long position.| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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