Correlation Between Lord Abbett and Jhancock Multimanager
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Jhancock Multimanager 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 Multimanager 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 Multimanager 2065, you can compare the effects of market volatilities on Lord Abbett and Jhancock Multimanager 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 Multimanager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Jhancock Multimanager.
Diversification Opportunities for Lord Abbett and Jhancock Multimanager
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lord and Jhancock is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Jhancock Multimanager 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Multimanager 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 Multimanager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Multimanager has no effect on the direction of Lord Abbett i.e., Lord Abbett and Jhancock Multimanager go up and down completely randomly.
Pair Corralation between Lord Abbett and Jhancock Multimanager
Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 0.66 times more return on investment than Jhancock Multimanager. However, Lord Abbett Convertible is 1.51 times less risky than Jhancock Multimanager. It trades about 0.19 of its potential returns per unit of risk. Jhancock Multimanager 2065 is currently generating about 0.1 per unit of risk. If you would invest 1,317 in Lord Abbett Convertible on September 1, 2024 and sell it today you would earn a total of 176.00 from holding Lord Abbett Convertible or generate 13.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Lord Abbett Convertible vs. Jhancock Multimanager 2065
Performance |
| Timeline |
| Lord Abbett Convertible |
| Jhancock Multimanager |
Lord Abbett and Jhancock Multimanager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Jhancock Multimanager
The main advantage of trading using opposite Lord Abbett and Jhancock Multimanager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Jhancock Multimanager 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 Multimanager will offset losses from the drop in Jhancock Multimanager's long position.| Lord Abbett vs. Ab Bond Inflation | Lord Abbett vs. Nuveen Arizona Municipal | Lord Abbett vs. Federated Ohio Municipal | Lord Abbett vs. Oklahoma Municipal Fund |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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