Correlation Between Lord Abbett and Vaughan Nelson
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Vaughan Nelson 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 Vaughan Nelson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Vertible and Vaughan Nelson Select, you can compare the effects of market volatilities on Lord Abbett and Vaughan Nelson 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 Vaughan Nelson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Vaughan Nelson.
Diversification Opportunities for Lord Abbett and Vaughan Nelson
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lord and Vaughan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Vertible and Vaughan Nelson Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaughan Nelson Select 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 Vertible are associated (or correlated) with Vaughan Nelson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaughan Nelson Select has no effect on the direction of Lord Abbett i.e., Lord Abbett and Vaughan Nelson go up and down completely randomly.
Pair Corralation between Lord Abbett and Vaughan Nelson
Assuming the 90 days horizon Lord Abbett Vertible is expected to generate 0.52 times more return on investment than Vaughan Nelson. However, Lord Abbett Vertible is 1.92 times less risky than Vaughan Nelson. It trades about 0.48 of its potential returns per unit of risk. Vaughan Nelson Select is currently generating about 0.11 per unit of risk. If you would invest 1,367 in Lord Abbett Vertible on August 29, 2024 and sell it today you would earn a total of 88.00 from holding Lord Abbett Vertible or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Vertible vs. Vaughan Nelson Select
Performance |
| Timeline |
| Lord Abbett Vertible |
| Vaughan Nelson Select |
Lord Abbett and Vaughan Nelson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Vaughan Nelson
The main advantage of trading using opposite Lord Abbett and Vaughan Nelson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Vaughan Nelson 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 Vaughan Nelson will offset losses from the drop in Vaughan Nelson's long position.| Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate Fund | Lord Abbett vs. Floating Rate Fund | Lord Abbett vs. Lord Abbett Inv |
| Vaughan Nelson vs. Virtus Convertible | Vaughan Nelson vs. Advent Claymore Convertible | Vaughan Nelson vs. Lord Abbett Vertible | Vaughan Nelson vs. Mainstay Vertible Fund |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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