Correlation Between Lord Abbett and Sit Mutual
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Sit Mutual 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 Sit Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Short and Sit Mutual Funds, you can compare the effects of market volatilities on Lord Abbett and Sit Mutual 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 Sit Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Sit Mutual.
Diversification Opportunities for Lord Abbett and Sit Mutual
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Sit is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Sit Mutual Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Mutual Funds 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 Short are associated (or correlated) with Sit Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Mutual Funds has no effect on the direction of Lord Abbett i.e., Lord Abbett and Sit Mutual go up and down completely randomly.
Pair Corralation between Lord Abbett and Sit Mutual
Assuming the 90 days horizon Lord Abbett is expected to generate 1.56 times less return on investment than Sit Mutual. But when comparing it to its historical volatility, Lord Abbett Short is 1.3 times less risky than Sit Mutual. It trades about 0.12 of its potential returns per unit of risk. Sit Mutual Funds is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 951.00 in Sit Mutual Funds on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Sit Mutual Funds or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lord Abbett Short vs. Sit Mutual Funds
Performance |
| Timeline |
| Lord Abbett Short |
| Sit Mutual Funds |
Lord Abbett and Sit Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Sit Mutual
The main advantage of trading using opposite Lord Abbett and Sit Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Sit Mutual 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 Sit Mutual will offset losses from the drop in Sit Mutual's long position.| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate Fund |
| Sit Mutual vs. Alternative Asset Allocation | Sit Mutual vs. Legg Mason Bw | Sit Mutual vs. T Rowe Price | Sit Mutual vs. Pace Large Growth |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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