Correlation Between Lord Abbett and Aqr Alternative
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Aqr Alternative 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 Aqr Alternative 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 Aqr Alternative Risk, you can compare the effects of market volatilities on Lord Abbett and Aqr Alternative 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 Aqr Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Aqr Alternative.
Diversification Opportunities for Lord Abbett and Aqr Alternative
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lord and Aqr is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible and Aqr Alternative Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Alternative Risk 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 Aqr Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Alternative Risk has no effect on the direction of Lord Abbett i.e., Lord Abbett and Aqr Alternative go up and down completely randomly.
Pair Corralation between Lord Abbett and Aqr Alternative
Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 0.95 times more return on investment than Aqr Alternative. However, Lord Abbett Convertible is 1.05 times less risky than Aqr Alternative. It trades about 0.17 of its potential returns per unit of risk. Aqr Alternative Risk is currently generating about 0.11 per unit of risk. If you would invest 1,453 in Lord Abbett Convertible on September 14, 2024 and sell it today you would earn a total of 29.00 from holding Lord Abbett Convertible or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Convertible vs. Aqr Alternative Risk
Performance |
| Timeline |
| Lord Abbett Convertible |
| Aqr Alternative Risk |
Lord Abbett and Aqr Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Aqr Alternative
The main advantage of trading using opposite Lord Abbett and Aqr Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Aqr Alternative 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 Aqr Alternative will offset losses from the drop in Aqr Alternative's long position.| Lord Abbett vs. Towpath Technology | Lord Abbett vs. Columbia Global Technology | Lord Abbett vs. Pgim Jennison Technology | Lord Abbett vs. Dreyfus Technology Growth |
| Aqr Alternative vs. Gabelli Convertible And | Aqr Alternative vs. Virtus Convertible | Aqr Alternative vs. Lord Abbett Convertible | Aqr Alternative vs. Calamos Dynamic Convertible |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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