Correlation Between Lord Abbett and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Floating Rate 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 Floating Rate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Focused and Floating Rate Fund, you can compare the effects of market volatilities on Lord Abbett and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Floating Rate.
Diversification Opportunities for Lord Abbett and Floating Rate
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lord and Floating is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Focused and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Focused are associated (or correlated) with Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Lord Abbett i.e., Lord Abbett and Floating Rate go up and down completely randomly.
Pair Corralation between Lord Abbett and Floating Rate
Assuming the 90 days horizon Lord Abbett Focused is expected to generate 18.21 times more return on investment than Floating Rate. However, Lord Abbett is 18.21 times more volatile than Floating Rate Fund. It trades about 0.08 of its potential returns per unit of risk. Floating Rate Fund is currently generating about 0.28 per unit of risk. If you would invest 3,110 in Lord Abbett Focused on August 29, 2024 and sell it today you would earn a total of 104.00 from holding Lord Abbett Focused or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lord Abbett Focused vs. Floating Rate Fund
Performance |
| Timeline |
| Lord Abbett Focused |
| Floating Rate |
Lord Abbett and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Floating Rate
The main advantage of trading using opposite Lord Abbett and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| Lord Abbett vs. T Rowe Price | Lord Abbett vs. Nasdaq 100 Index Fund | Lord Abbett vs. Nova Fund Class | Lord Abbett vs. Omni Small Cap Value |
| Floating Rate vs. Oppenheimer Senior Floating | Floating Rate vs. Floating Rate Fund | Floating Rate vs. Lord Abbett Inv | Floating Rate vs. HUMANA INC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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