Correlation Between Lord Abbett and Federated Short-intermedia
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Federated Short-intermedia 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 Federated Short-intermedia 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 Federated Short Intermediate Duration, you can compare the effects of market volatilities on Lord Abbett and Federated Short-intermedia 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 Federated Short-intermedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Federated Short-intermedia.
Diversification Opportunities for Lord Abbett and Federated Short-intermedia
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between LORD and FEDERATED is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Growth and Federated Short Intermediate D in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Short-intermedia 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 Federated Short-intermedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Short-intermedia has no effect on the direction of Lord Abbett i.e., Lord Abbett and Federated Short-intermedia go up and down completely randomly.
Pair Corralation between Lord Abbett and Federated Short-intermedia
Assuming the 90 days horizon Lord Abbett Growth is expected to generate 12.59 times more return on investment than Federated Short-intermedia. However, Lord Abbett is 12.59 times more volatile than Federated Short Intermediate Duration. It trades about 0.1 of its potential returns per unit of risk. Federated Short Intermediate Duration is currently generating about 0.13 per unit of risk. If you would invest 2,475 in Lord Abbett Growth on August 30, 2024 and sell it today you would earn a total of 2,063 from holding Lord Abbett Growth or generate 83.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Growth vs. Federated Short Intermediate D
Performance |
| Timeline |
| Lord Abbett Growth |
| Federated Short-intermedia |
Lord Abbett and Federated Short-intermedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Federated Short-intermedia
The main advantage of trading using opposite Lord Abbett and Federated Short-intermedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Federated Short-intermedia 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 Federated Short-intermedia will offset losses from the drop in Federated Short-intermedia's long position.| Lord Abbett vs. Barings Active Short | Lord Abbett vs. Multisector Bond Sma | Lord Abbett vs. Sterling Capital Short | Lord Abbett vs. Federated Short Intermediate Duration |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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