Correlation Between Lord Abbett and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Credit Suisse 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 Credit Suisse 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 Credit Suisse Strategic, you can compare the effects of market volatilities on Lord Abbett and Credit Suisse 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 Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Credit Suisse.
Diversification Opportunities for Lord Abbett and Credit Suisse
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LORD and Credit is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Vertible and Credit Suisse Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Strategic 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 Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse Strategic has no effect on the direction of Lord Abbett i.e., Lord Abbett and Credit Suisse go up and down completely randomly.
Pair Corralation between Lord Abbett and Credit Suisse
Assuming the 90 days horizon Lord Abbett Vertible is expected to generate 2.83 times more return on investment than Credit Suisse. However, Lord Abbett is 2.83 times more volatile than Credit Suisse Strategic. It trades about 0.07 of its potential returns per unit of risk. Credit Suisse Strategic is currently generating about 0.2 per unit of risk. If you would invest 1,199 in Lord Abbett Vertible on August 26, 2024 and sell it today you would earn a total of 261.00 from holding Lord Abbett Vertible or generate 21.77% 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. Credit Suisse Strategic
Performance |
| Timeline |
| Lord Abbett Vertible |
| Credit Suisse Strategic |
Lord Abbett and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Credit Suisse
The main advantage of trading using opposite Lord Abbett and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse'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 |
| Credit Suisse vs. Lord Abbett Vertible | Credit Suisse vs. Miller Vertible Bond | Credit Suisse vs. Invesco Vertible Securities | Credit Suisse vs. Harbor Vertible Securities |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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