Correlation Between Lord Abbett and Bond Fund
Can any of the company-specific risk be diversified away by investing in both Lord Abbett and Bond Fund 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 Bond Fund 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 The Bond Fund, you can compare the effects of market volatilities on Lord Abbett and Bond Fund 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 Bond Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Bond Fund.
Diversification Opportunities for Lord Abbett and Bond Fund
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lord and Bond is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Health and The Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund 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 Bond Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund has no effect on the direction of Lord Abbett i.e., Lord Abbett and Bond Fund go up and down completely randomly.
Pair Corralation between Lord Abbett and Bond Fund
Assuming the 90 days horizon Lord Abbett Health is expected to generate 2.5 times more return on investment than Bond Fund. However, Lord Abbett is 2.5 times more volatile than The Bond Fund. It trades about 0.03 of its potential returns per unit of risk. The Bond Fund is currently generating about 0.04 per unit of risk. If you would invest 1,730 in Lord Abbett Health on September 3, 2024 and sell it today you would earn a total of 254.00 from holding Lord Abbett Health or generate 14.68% 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. The Bond Fund
Performance |
| Timeline |
| Lord Abbett Health |
| Bond Fund |
Lord Abbett and Bond Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Bond Fund
The main advantage of trading using opposite Lord Abbett and Bond Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett position performs unexpectedly, Bond Fund 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 Bond Fund will offset losses from the drop in Bond Fund's long position.| Lord Abbett vs. Fidelity Real Estate | Lord Abbett vs. Us Real Estate | Lord Abbett vs. Vanguard Reit Index | Lord Abbett vs. Commonwealth Real Estate |
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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.
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