Correlation Between Lord Abbett and American Beacon
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and American Beacon 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 American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Inv and American Beacon Soundpointfltrtinc, you can compare the effects of market volatilities on Lord Abbett and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and American Beacon.
Diversification Opportunities for Lord Abbett and American Beacon
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lord and American is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Inv and American Beacon Soundpointfltr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Soun 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 Inv are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Soun has no effect on the direction of Lord Abbett i.e., Lord Abbett and American Beacon go up and down completely randomly.
Pair Corralation between Lord Abbett and American Beacon
Assuming the 90 days horizon Lord Abbett Inv is expected to generate 0.64 times more return on investment than American Beacon. However, Lord Abbett Inv is 1.56 times less risky than American Beacon. It trades about 0.29 of its potential returns per unit of risk. American Beacon Soundpointfltrtinc is currently generating about 0.0 per unit of risk. If you would invest 813.00 in Lord Abbett Inv on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Lord Abbett Inv or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lord Abbett Inv vs. American Beacon Soundpointfltr
Performance |
| Timeline |
| Lord Abbett Inv |
| American Beacon Soun |
Lord Abbett and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and American Beacon
The main advantage of trading using opposite Lord Abbett and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Lord Abbett vs. Ab Small Cap | Lord Abbett vs. Ancorathelen Small Mid Cap | Lord Abbett vs. Qs Small Capitalization | Lord Abbett vs. Artisan Small Cap |
| American Beacon vs. Semper Mbs Total | American Beacon vs. Eaton Vance Floating Rate | American Beacon vs. Artisan High Income | American Beacon vs. Performance Trust Strategic |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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