Correlation Between Lord Abbett and Payden Low
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Payden Low 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 Payden Low 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 Payden Low Duration, you can compare the effects of market volatilities on Lord Abbett and Payden Low 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 Payden Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Payden Low.
Diversification Opportunities for Lord Abbett and Payden Low
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lord and Payden is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Short and Payden Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Low Duration 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 Payden Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Low Duration has no effect on the direction of Lord Abbett i.e., Lord Abbett and Payden Low go up and down completely randomly.
Pair Corralation between Lord Abbett and Payden Low
Assuming the 90 days horizon Lord Abbett is expected to generate 1.05 times less return on investment than Payden Low. In addition to that, Lord Abbett is 1.19 times more volatile than Payden Low Duration. It trades about 0.11 of its total potential returns per unit of risk. Payden Low Duration is currently generating about 0.14 per unit of volatility. If you would invest 882.00 in Payden Low Duration on November 27, 2024 and sell it today you would earn a total of 98.00 from holding Payden Low Duration or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Short vs. Payden Low Duration
Performance |
| Timeline |
| Lord Abbett Short |
| Payden Low Duration |
Lord Abbett and Payden Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Payden Low
The main advantage of trading using opposite Lord Abbett and Payden Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Payden Low 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 Payden Low will offset losses from the drop in Payden Low's long position.| Lord Abbett vs. Aqr Risk Parity | Lord Abbett vs. Artisan High Income | Lord Abbett vs. Aqr Alternative Risk | Lord Abbett vs. Intal High Relative |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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