Correlation Between Lord Abbett and Fidelity Puritan
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Fidelity Puritan 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 Fidelity Puritan 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 Fidelity Puritan Fund, you can compare the effects of market volatilities on Lord Abbett and Fidelity Puritan 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 Fidelity Puritan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Fidelity Puritan.
Diversification Opportunities for Lord Abbett and Fidelity Puritan
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lord and Fidelity is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Fidelity Puritan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Puritan 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 Fidelity Puritan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Puritan has no effect on the direction of Lord Abbett i.e., Lord Abbett and Fidelity Puritan go up and down completely randomly.
Pair Corralation between Lord Abbett and Fidelity Puritan
Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 0.66 times more return on investment than Fidelity Puritan. However, Lord Abbett Convertible is 1.51 times less risky than Fidelity Puritan. It trades about 0.18 of its potential returns per unit of risk. Fidelity Puritan Fund is currently generating about 0.02 per unit of risk. If you would invest 1,308 in Lord Abbett Convertible on November 7, 2024 and sell it today you would earn a total of 178.00 from holding Lord Abbett Convertible or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Convertible vs. Fidelity Puritan Fund
Performance |
| Timeline |
| Lord Abbett Convertible |
| Fidelity Puritan |
Lord Abbett and Fidelity Puritan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Fidelity Puritan
The main advantage of trading using opposite Lord Abbett and Fidelity Puritan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Fidelity Puritan 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 Fidelity Puritan will offset losses from the drop in Fidelity Puritan's long position.| Lord Abbett vs. John Hancock Money | Lord Abbett vs. Money Market Obligations | Lord Abbett vs. Putnam Money Market | Lord Abbett vs. Edward Jones Money |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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