Correlation Between Lord Abbett and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Teton Westwood 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 Teton Westwood 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 Teton Westwood Balanced, you can compare the effects of market volatilities on Lord Abbett and Teton Westwood 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 Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Teton Westwood.
Diversification Opportunities for Lord Abbett and Teton Westwood
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lord and Teton is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Affiliated and Teton Westwood Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Balanced 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 Teton Westwood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teton Westwood Balanced has no effect on the direction of Lord Abbett i.e., Lord Abbett and Teton Westwood go up and down completely randomly.
Pair Corralation between Lord Abbett and Teton Westwood
Assuming the 90 days horizon Lord Abbett Affiliated is expected to generate 0.75 times more return on investment than Teton Westwood. However, Lord Abbett Affiliated is 1.33 times less risky than Teton Westwood. It trades about -0.25 of its potential returns per unit of risk. Teton Westwood Balanced is currently generating about -0.22 per unit of risk. If you would invest 2,051 in Lord Abbett Affiliated on September 13, 2024 and sell it today you would lose (104.00) from holding Lord Abbett Affiliated or give up 5.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Affiliated vs. Teton Westwood Balanced
Performance |
| Timeline |
| Lord Abbett Affiliated |
| Teton Westwood Balanced |
Lord Abbett and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Teton Westwood
The main advantage of trading using opposite Lord Abbett and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Teton Westwood 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 Teton Westwood will offset losses from the drop in Teton Westwood'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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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