Correlation Between Lord Abbett and Pace Municipal
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Pace Municipal 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 Pace Municipal 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 Pace Municipal Fixed, you can compare the effects of market volatilities on Lord Abbett and Pace Municipal 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 Pace Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Pace Municipal.
Diversification Opportunities for Lord Abbett and Pace Municipal
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Pace is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Pace Municipal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Municipal Fixed 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 Pace Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Municipal Fixed has no effect on the direction of Lord Abbett i.e., Lord Abbett and Pace Municipal go up and down completely randomly.
Pair Corralation between Lord Abbett and Pace Municipal
Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 2.13 times more return on investment than Pace Municipal. However, Lord Abbett is 2.13 times more volatile than Pace Municipal Fixed. It trades about 0.69 of its potential returns per unit of risk. Pace Municipal Fixed is currently generating about 0.17 per unit of risk. If you would invest 1,382 in Lord Abbett Convertible on September 3, 2024 and sell it today you would earn a total of 111.00 from holding Lord Abbett Convertible or generate 8.03% 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. Pace Municipal Fixed
Performance |
| Timeline |
| Lord Abbett Convertible |
| Pace Municipal Fixed |
Lord Abbett and Pace Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Pace Municipal
The main advantage of trading using opposite Lord Abbett and Pace Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Pace Municipal 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 Pace Municipal will offset losses from the drop in Pace Municipal'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 |
| Pace Municipal vs. Lord Abbett Convertible | Pace Municipal vs. Virtus Convertible | Pace Municipal vs. Allianzgi Convertible Income | Pace Municipal vs. Absolute Convertible Arbitrage |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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