Correlation Between Lord Abbett and Jhancock Multi-index
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Jhancock Multi-index 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 Jhancock Multi-index 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 Jhancock Multi Index 2065, you can compare the effects of market volatilities on Lord Abbett and Jhancock Multi-index 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 Jhancock Multi-index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Jhancock Multi-index.
Diversification Opportunities for Lord Abbett and Jhancock Multi-index
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lord and Jhancock is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Jhancock Multi Index 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Multi Index 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 Jhancock Multi-index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Multi Index has no effect on the direction of Lord Abbett i.e., Lord Abbett and Jhancock Multi-index go up and down completely randomly.
Pair Corralation between Lord Abbett and Jhancock Multi-index
Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 0.69 times more return on investment than Jhancock Multi-index. However, Lord Abbett Convertible is 1.44 times less risky than Jhancock Multi-index. It trades about 0.15 of its potential returns per unit of risk. Jhancock Multi Index 2065 is currently generating about 0.1 per unit of risk. If you would invest 1,320 in Lord Abbett Convertible on September 3, 2024 and sell it today you would earn a total of 173.00 from holding Lord Abbett Convertible or generate 13.11% 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. Jhancock Multi Index 2065
Performance |
| Timeline |
| Lord Abbett Convertible |
| Jhancock Multi Index |
Lord Abbett and Jhancock Multi-index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Jhancock Multi-index
The main advantage of trading using opposite Lord Abbett and Jhancock Multi-index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Jhancock Multi-index 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 Jhancock Multi-index will offset losses from the drop in Jhancock Multi-index's long position.| Lord Abbett vs. Franklin Vertible Securities | Lord Abbett vs. Franklin Vertible Securities | Lord Abbett vs. Allianzgi Vertible Fund | Lord Abbett vs. Virtus Convertible |
| Jhancock Multi-index vs. Commonwealth Global Fund | Jhancock Multi-index vs. Ab Global Real | Jhancock Multi-index vs. Alliancebernstein Global High | Jhancock Multi-index vs. Legg Mason Global |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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