Correlation Between Lord Abbett and Western Assets
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Western Assets 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 Western Assets 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 Western Assets Emerging, you can compare the effects of market volatilities on Lord Abbett and Western Assets 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 Western Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Western Assets.
Diversification Opportunities for Lord Abbett and Western Assets
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lord and Western is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Inv and Western Assets Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Assets Emerging 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 Western Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Assets Emerging has no effect on the direction of Lord Abbett i.e., Lord Abbett and Western Assets go up and down completely randomly.
Pair Corralation between Lord Abbett and Western Assets
Assuming the 90 days horizon Lord Abbett Inv is expected to generate 0.39 times more return on investment than Western Assets. However, Lord Abbett Inv is 2.57 times less risky than Western Assets. It trades about 0.32 of its potential returns per unit of risk. Western Assets Emerging is currently generating about -0.09 per unit of risk. If you would invest 805.00 in Lord Abbett Inv on August 28, 2024 and sell it today you would earn a total of 14.00 from holding Lord Abbett Inv or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Inv vs. Western Assets Emerging
Performance |
| Timeline |
| Lord Abbett Inv |
| Western Assets Emerging |
Lord Abbett and Western Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Western Assets
The main advantage of trading using opposite Lord Abbett and Western Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Western Assets 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 Western Assets will offset losses from the drop in Western Assets' long position.| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Lord Abbett Focused |
| Western Assets vs. Federated Mdt Large | Western Assets vs. Knights Of Umbus | Western Assets vs. Goldman Sachs Large | Western Assets vs. Qs Large Cap |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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