Correlation Between Lord Abbett and Baron Health
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Baron Health 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 Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Growth and Baron Health Care, you can compare the effects of market volatilities on Lord Abbett and Baron Health 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 Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Baron Health.
Diversification Opportunities for Lord Abbett and Baron Health
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lord and Baron is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Growth and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care 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 Growth are associated (or correlated) with Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Lord Abbett i.e., Lord Abbett and Baron Health go up and down completely randomly.
Pair Corralation between Lord Abbett and Baron Health
Assuming the 90 days horizon Lord Abbett Growth is expected to generate 1.63 times more return on investment than Baron Health. However, Lord Abbett is 1.63 times more volatile than Baron Health Care. It trades about 0.1 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.03 per unit of risk. If you would invest 2,525 in Lord Abbett Growth on September 4, 2024 and sell it today you would earn a total of 2,068 from holding Lord Abbett Growth or generate 81.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Growth vs. Baron Health Care
Performance |
| Timeline |
| Lord Abbett Growth |
| Baron Health Care |
Lord Abbett and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Baron Health
The main advantage of trading using opposite Lord Abbett and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Baron Health 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 Baron Health will offset losses from the drop in Baron Health's long position.| Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Trust | Lord Abbett vs. Lord Abbett Focused | Lord Abbett vs. Floating Rate Fund |
| Baron Health vs. Federated Pennsylvania Municipal | Baron Health vs. Franklin High Yield | Baron Health vs. Bbh Intermediate Municipal | Baron Health vs. Vanguard California Long Term |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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