Correlation Between Lord Abbett and Aqr International
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Aqr International 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 Aqr International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Health and Aqr International Defensive, you can compare the effects of market volatilities on Lord Abbett and Aqr International 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 Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Aqr International.
Diversification Opportunities for Lord Abbett and Aqr International
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lord and Aqr is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Health and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International 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 Health are associated (or correlated) with Aqr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr International has no effect on the direction of Lord Abbett i.e., Lord Abbett and Aqr International go up and down completely randomly.
Pair Corralation between Lord Abbett and Aqr International
Assuming the 90 days horizon Lord Abbett is expected to generate 1.16 times less return on investment than Aqr International. In addition to that, Lord Abbett is 1.41 times more volatile than Aqr International Defensive. It trades about 0.04 of its total potential returns per unit of risk. Aqr International Defensive is currently generating about 0.06 per unit of volatility. If you would invest 1,229 in Aqr International Defensive on September 5, 2024 and sell it today you would earn a total of 256.00 from holding Aqr International Defensive or generate 20.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Health vs. Aqr International Defensive
Performance |
| Timeline |
| Lord Abbett Health |
| Aqr International |
Lord Abbett and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Aqr International
The main advantage of trading using opposite Lord Abbett and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Aqr International 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 Aqr International will offset losses from the drop in Aqr International's long position.| Lord Abbett vs. Scharf Global Opportunity | Lord Abbett vs. Nationwide Global Equity | Lord Abbett vs. Ab Global Risk | Lord Abbett vs. Ab Global Real |
| Aqr International vs. Aqr Large Cap | Aqr International vs. Aqr Large Cap | Aqr International vs. Aqr International Defensive | Aqr International vs. Aqr International Defensive |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |