Correlation Between Lord Abbett and Barings Active
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Barings Active 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 Barings Active 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 Barings Active Short, you can compare the effects of market volatilities on Lord Abbett and Barings Active 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 Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Barings Active.
Diversification Opportunities for Lord Abbett and Barings Active
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lord and Barings is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Barings Active Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Active Short 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 Barings Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Active Short has no effect on the direction of Lord Abbett i.e., Lord Abbett and Barings Active go up and down completely randomly.
Pair Corralation between Lord Abbett and Barings Active
Assuming the 90 days horizon Lord Abbett is expected to generate 1.3 times less return on investment than Barings Active. In addition to that, Lord Abbett is 1.14 times more volatile than Barings Active Short. It trades about 0.16 of its total potential returns per unit of risk. Barings Active Short is currently generating about 0.24 per unit of volatility. If you would invest 886.00 in Barings Active Short on August 24, 2024 and sell it today you would earn a total of 37.00 from holding Barings Active Short or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Short vs. Barings Active Short
Performance |
| Timeline |
| Lord Abbett Short |
| Barings Active Short |
Lord Abbett and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Barings Active
The main advantage of trading using opposite Lord Abbett and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Barings Active 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 Barings Active will offset losses from the drop in Barings Active's long position.| Lord Abbett vs. Vanguard Short Term Bond | Lord Abbett vs. Vanguard Short Term Investment Grade | Lord Abbett vs. Vanguard Short Term Investment Grade | Lord Abbett vs. Vanguard Short Term Investment Grade |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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