Correlation Between Lord Abbett and Consumer Staples
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Consumer Staples 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 Consumer Staples 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 Consumer Staples Portfolio, you can compare the effects of market volatilities on Lord Abbett and Consumer Staples 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 Consumer Staples. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Consumer Staples.
Diversification Opportunities for Lord Abbett and Consumer Staples
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lord and Consumer is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Consumer Staples Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Staples Por 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 Consumer Staples. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Staples Por has no effect on the direction of Lord Abbett i.e., Lord Abbett and Consumer Staples go up and down completely randomly.
Pair Corralation between Lord Abbett and Consumer Staples
Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 0.68 times more return on investment than Consumer Staples. However, Lord Abbett Convertible is 1.46 times less risky than Consumer Staples. It trades about 0.15 of its potential returns per unit of risk. Consumer Staples Portfolio is currently generating about 0.05 per unit of risk. If you would invest 1,451 in Lord Abbett Convertible on November 5, 2024 and sell it today you would earn a total of 30.00 from holding Lord Abbett Convertible or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Convertible vs. Consumer Staples Portfolio
Performance |
| Timeline |
| Lord Abbett Convertible |
| Consumer Staples Por |
Lord Abbett and Consumer Staples Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Consumer Staples
The main advantage of trading using opposite Lord Abbett and Consumer Staples positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Consumer Staples 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 Consumer Staples will offset losses from the drop in Consumer Staples' long position.| Lord Abbett vs. Prudential Real Estate | Lord Abbett vs. Neuberger Berman Real | Lord Abbett vs. Real Estate Ultrasector | Lord Abbett vs. Nexpoint Real Estate |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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