Correlation Between Lord Abbett and Blue Chip
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Blue Chip 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 Blue Chip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Emerging and Blue Chip Fund, you can compare the effects of market volatilities on Lord Abbett and Blue Chip 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 Blue Chip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Blue Chip.
Diversification Opportunities for Lord Abbett and Blue Chip
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lord and Blue is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Emerging and Blue Chip Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Chip Fund 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 Emerging are associated (or correlated) with Blue Chip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Chip Fund has no effect on the direction of Lord Abbett i.e., Lord Abbett and Blue Chip go up and down completely randomly.
Pair Corralation between Lord Abbett and Blue Chip
Assuming the 90 days horizon Lord Abbett is expected to generate 4.76 times less return on investment than Blue Chip. But when comparing it to its historical volatility, Lord Abbett Emerging is 3.08 times less risky than Blue Chip. It trades about 0.17 of its potential returns per unit of risk. Blue Chip Fund is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 4,509 in Blue Chip Fund on September 4, 2024 and sell it today you would earn a total of 207.00 from holding Blue Chip Fund or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Lord Abbett Emerging vs. Blue Chip Fund
Performance |
| Timeline |
| Lord Abbett Emerging |
| Blue Chip Fund |
Lord Abbett and Blue Chip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Blue Chip
The main advantage of trading using opposite Lord Abbett and Blue Chip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Blue Chip 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 Blue Chip will offset losses from the drop in Blue Chip's long position.| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Floating Rate Fund | Lord Abbett vs. Floating Rate Fund |
| Blue Chip vs. Transamerica Funds | Blue Chip vs. Ashmore Emerging Markets | Blue Chip vs. Lord Abbett Emerging | Blue Chip vs. Dws Government Money |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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