Correlation Between Lord Abbett and Ab Global

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Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Ab Global 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 Ab Global 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 Ab Global Bond, you can compare the effects of market volatilities on Lord Abbett and Ab Global 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 Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Ab Global.

Diversification Opportunities for Lord Abbett and Ab Global

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Lord and ANAGX is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Ab Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Bond 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Bond has no effect on the direction of Lord Abbett i.e., Lord Abbett and Ab Global go up and down completely randomly.

Pair Corralation between Lord Abbett and Ab Global

Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 2.99 times more return on investment than Ab Global. However, Lord Abbett is 2.99 times more volatile than Ab Global Bond. It trades about 0.09 of its potential returns per unit of risk. Ab Global Bond is currently generating about 0.22 per unit of risk. If you would invest  1,458  in Lord Abbett Convertible on September 12, 2024 and sell it today you would earn a total of  15.00  from holding Lord Abbett Convertible or generate 1.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Lord Abbett Convertible  vs.  Ab Global Bond

 Performance 
       Timeline  
Lord Abbett Convertible 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Convertible are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Lord Abbett may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Ab Global Bond 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ab Global Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Ab Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lord Abbett and Ab Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lord Abbett and Ab Global

The main advantage of trading using opposite Lord Abbett and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.
The idea behind Lord Abbett Convertible and Ab Global Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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