Correlation Between Lord Abbett and Global Hard

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Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Global Hard 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 Global Hard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Investment and Global Hard Assets, you can compare the effects of market volatilities on Lord Abbett and Global Hard 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 Global Hard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Global Hard.

Diversification Opportunities for Lord Abbett and Global Hard

LordGlobalDiversified AwayLordGlobalDiversified Away100%
-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between Lord and Global is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Investment and Global Hard Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Hard Assets 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 Investment are associated (or correlated) with Global Hard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Hard Assets has no effect on the direction of Lord Abbett i.e., Lord Abbett and Global Hard go up and down completely randomly.

Pair Corralation between Lord Abbett and Global Hard

Assuming the 90 days horizon Lord Abbett Investment is expected to generate 0.11 times more return on investment than Global Hard. However, Lord Abbett Investment is 9.42 times less risky than Global Hard. It trades about 0.28 of its potential returns per unit of risk. Global Hard Assets is currently generating about 0.0 per unit of risk. If you would invest  888.00  in Lord Abbett Investment on November 26, 2024 and sell it today you would earn a total of  141.00  from holding Lord Abbett Investment or generate 15.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy90.1%
ValuesDaily Returns

Lord Abbett Investment  vs.  Global Hard Assets

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -8-6-4-202
JavaScript chart by amCharts 3.21.15LGRAX GHAAX
       Timeline  
Lord Abbett Investment 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Investment are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lord Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb10.110.1510.210.25
Global Hard Assets 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Global Hard Assets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Global Hard is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3636.53737.53838.53939.5

Lord Abbett and Global Hard Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.24-0.092-0.0628-0.0336-0.0058440.02660.05810.09140.240.44 51015202530
JavaScript chart by amCharts 3.21.15LGRAX GHAAX
       Returns  

Pair Trading with Lord Abbett and Global Hard

The main advantage of trading using opposite Lord Abbett and Global Hard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Global Hard 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 Global Hard will offset losses from the drop in Global Hard's long position.
The idea behind Lord Abbett Investment and Global Hard Assets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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