Correlation Between Lord Abbett and Alger International
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Alger International 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 Alger International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Convertible and Alger International Growth, you can compare the effects of market volatilities on Lord Abbett and Alger International 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 Alger International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Alger International.
Diversification Opportunities for Lord Abbett and Alger International
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lord and Alger is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Alger International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger International 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 Convertible are associated (or correlated) with Alger International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger International has no effect on the direction of Lord Abbett i.e., Lord Abbett and Alger International go up and down completely randomly.
Pair Corralation between Lord Abbett and Alger International
Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 0.75 times more return on investment than Alger International. However, Lord Abbett Convertible is 1.34 times less risky than Alger International. It trades about 0.28 of its potential returns per unit of risk. Alger International Growth is currently generating about -0.02 per unit of risk. If you would invest 1,347 in Lord Abbett Convertible on September 12, 2024 and sell it today you would earn a total of 126.00 from holding Lord Abbett Convertible or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Lord Abbett Convertible vs. Alger International Growth
Performance |
| Timeline |
| Lord Abbett Convertible |
| Alger International |
Lord Abbett and Alger International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Alger International
The main advantage of trading using opposite Lord Abbett and Alger International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Alger International 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 Alger International will offset losses from the drop in Alger International's long position.| Lord Abbett vs. Franklin Vertible Securities | Lord Abbett vs. Franklin Vertible Securities | Lord Abbett vs. Franklin Vertible Securities | Lord Abbett vs. Franklin Vertible Securities |
| Alger International vs. Sit Government Securities | Alger International vs. Inverse Government Long | Alger International vs. Dreyfus Government Cash | Alger International vs. Hsbc Government Money |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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